The Big Myth: How American Business Taught Us to Loathe Government and Love the Free Market / Naomi Oreskes and Erik M. Conway, NY: Bloomsbury Pub., 2023

 In 2010, Naomi Oreskes and Erik Conway released The Merchants of Doubt, an account of the actions of the fossil fuel industry and their agents to sow doubt in the public mind about the reality and danger of climate change.  Their book had a powerful effect on how the public understands the politics of climate policy, and it set the stage for numerous legal actions to hold the "merchants of doubt" responsible for the current and accumulating harms of climate change.  Law suits are slowing making their way through state courts around the country.  If these cases succeed, the transition toward a clean and reliable energy economy will be much accelerated.

Among the questions raised by The Merchants of Doubt was how four scientists, who were the leading figures challenging climate action, could deny the scientific consensus regarding the fact and danger of climate change.  Oreskes and Conway concluded that they were entranced by the ideology of "the free market."  How did this ideology become so powerful?  The Big Myth provides a powerful case that it was the result of a decades-long public relations effort by American business and industrial associations.

The propaganda effort began in the early decades of the 20th century when the National Association of Manufacturers (NAM), founded in 1895, fought progressive era regulations to restrict child labor, establish workers' compensation relief systems, and empower unionization.  They were, of course ultimately unsuccessful, but their opposition demonstrated the necessity of government regulation to protect the interests of ordinary citizens from exploitation by business and industrial elites. 

Later, in the 1920s, the nation's privately owned electrical grids were failing to bring electricity to rural areas.  This led to a drive for "rural electrification" legislation that would create a rational electrical grid system serving urban and rural regions alike.  The effort was opposed by the National Electric Light Association (NELA), an association of electric utilities founded in 1885 and which later became the Edison Electric Institute.  NELA was successful until New Deal legislation finally established the Rural Electrification Administration and imposed regulations to expand access to electricity.  Here we see government action, as opposed to unregulated market forces, being responsible for creating the conditions for expanded economic prosperity.

The danger of regulations, unionization, and government planning alleged by NAM and NELA was, of course, said to be the slippery slope leading to socialism.  They argued that once government intrudes in one sector of life, it will inevitably intrude in every sector.  Oreskes and Conway point out that this reveals the false dilemma that lay behind the propaganda: economies must either be laissez faire or entirely controlled by a central authority.  The business propagandists never acknowledged that there are countless ways to organize an economy between these two poles.  

Despite the massive market failure that produced the Great Depression, business and industry lobbyists doubled down on their commitment to unregulated capitalism and resisted New Deal efforts to restore economic stability and security.  Out of this, NAM developed what Oreskes and Conway call the "indivisibility thesis," i.e., that political, religious, and economic freedom were "indivisible."  This meant any assault on the prerogatives of the private sector was also (or ultimately) an assault on political and religious freedom.  Later, this "tripod of freedom" was boiled down simply to the inseparability of "democracy" and "free enterprise," though Billy Graham continued to promote a connection between religious freedom and "free markets."  

Business leaders created several organizations, most notably NAM's National Industrial Information Council (NIIC).  These organizations were established to propagandize in favor of unregulated capitalism.  Edward Bernays, the founder of modern public relations, was enlisted for support. The NIIC played a major role in the the campaign to shape public opinion through films, slide shows, newspaper advertisements, direct mail, billboards, posters, pamphlets, window displays, and other media.  In the late 1930s, NAM produced an extremely popular radio program, The American Family Robinson, which promoted "free market" fundamentalism.  In the 1940s and 1950s, NAM, with the assistance of Hollywood, was responsible for numerous films and news reels.

Also in the 1930s, Laura Ingalls Wilder was publishing her "little house" books, particularly Little House on the Prairie.  These books contained an intentional and not-so-well-disguised severe libertarian message.  The message was in large part due to the editorial influence of Wilder's daughter, Rose Wilder Lane.  Lane is considered among the three most important founders of the modern libertarian movement, along with Ayn Rand and Isabelle Paterson or "the three furies" as William F. Buckley dubbed them.

Oreskes and Conway also provide an interesting account of General Electric's television series General Electric Theatre, hosted by Ronald Reagan.  General Electric Theatre, airing weekly from 1953-1962, provided well-produced and engaging stories that promoted unregulated capitalism.  Reagan's involvement with the program is widely recognized as what transformed him from a supporter of Roosevelt and the New Deal to the "anti-government" ideologue that he became.  

Much of the public relations efforts on behalf of unregulated capitalism came from business interests.  As this would easily be seen as self-serving, business leaders sought academic economists to give their ideology independent credibility.  Ludwig von Mises, Friedrich Hayek, and Milton Friedman served this purpose.  The careers of each were made possible by financial support from libertarian business interests despite strong opposition from the profession.  It is noteworthy, though, that the economic views of each were far less austere than how they were promoted by their patrons.  For example, Hayek's book The Road to Serfdom, was republished in a dumbed-down version in Reader's Digest in 1945, where any recognition of the important role of government in economic affairs was edited out.  A similar redaction of pro-government passages in Adam Smith's The Wealth of Nations was done by George Stigler for the University of Chicago Press in 1957.

One reoccurring theme in The Big Myth is that claims that a "free market" will better provide for economic prosperity and general social well-being are belied by the historical facts.  Instead, the unregulated capitalism has led to numerous significant market failures (especially the climate crisis), and that nearly all of the material and technological advances that make our lives safe and comfortable today have been the result of either direct government action or public-private partnerships initiated by the public sector.  Oreskes and Conway make a powerful case that the popular admiration of "free markets" is a product of special business and industrial interests working for their private gain without regard for the well-being of workers and consumers.   

The Big Myth is a massive work (565 pages, including bibliography and index).  This review provides only a slim sample of the history of the "free market" propaganda that has shaped so much of our discourse today.  It is a brilliant, extensive study that deserves anyone's attention who is interested in the controversies over the present day organization of our political and economic institutions.   

Above Average Carbon Emitters Among Low Income Households

I recently did a little research attempting to understand the effects of Citizens' Climate Lobby's carbon fee and dividend proposal on people in the lowest quintile of income earners.  Below is the result of that research.

Above Average Carbon Emitters Among Low Income Households[*]

Alan Mattlage, Ph.D., M.L.S.

One of many strengths of Citizens’ Climate Lobby’s (CCL) carbon fee and dividend proposal is that it provides a net benefit to 86% of households in the lowest quintile of income earners (Ummel, 2016).  The progressive distribution of benefits is driven by the fact that lower income households tend to have lower than average carbon footprints but will receive a modified equal per capita share of the revenues from the fee (one share for each adult and one-half share for each child up to two children per family).  This makes the proposal one of the most economically progressive methods for transitioning to a de-carbonized economy.  See Figure 1.  Benefiting 86% still leaves 14% of the lowest quintile worse off – that’s about 2.8% of all American households or about 3.5 million households (U.S. Census Bureau, 2016).  The following is an attempt to understand why these households are made worse off, how significant the burden is, and what can be done to relieve that burden.

The short answer is that we cannot know precisely who is burdened, but there are data that can give us a general understanding of the circumstances that will tend to make a household worse-off.

Figure 1 – Distribution of benefits and burdens across quintiles

Why are households made worse-off?

The obvious reason households are made worse off is that their dividend is less than the cost they incur from the carbon fee.  This is true no matter which quintile the household is in.  To answer the question why are 14% of the lowest income households made worse off, we need to understand why a household might have above-average emissions.  Some of those reasons will be particularly common to low income households. 

A net financial loss is probably the result of some combination of the following factors:

1. the household is composed of a single person,

2. the household’s electricity is provided disproportionately by a carbon-intensive fuel, like coal,

3. the household is located in a particularly harsh climate,

4. the household is poorly insulated and has inefficient HVAC equipment and appliances,

5. the household’s transportation costs are particularly high, and

6. the household buys an unusually large amount of carbon intensive consumer goods and services.

1. Household Composition

Perhaps the most important factor of all is the household’s size.  Single person households will receive only one dividend share, while needing to cover the entire cost of maintaining the household, e.g., utilities, transportation, and necessary household consumer goods.  Meanwhile, a two-adult household will receive twice the dividend, but they will share many of the costs of maintaining the household.  Consequently, single person households are likely to be disproportionately represented in those households suffering a loss no matter what income quintile they are in. 

This has been borne out by the household impact study conducted by Kevin Ummel for Citizens’ Climate Lobby.  Ummel compared the net benefits going to two household types: “minority households” and “elderly households.”  Minority households are composed of more members (sometimes more than two adults which compounds the dividend).  Elderly households are, by definition, composed of only one or two adults.  These households have similar incomes, but the mean benefit accruing to minority households would be significantly greater than the mean benefit accruing to elderly households:  $148/year for minority households versus $2/year for elderly households considering all households (Ummel, 2016, p. 31; U.S. Census Bureau, 2016).  For households in just the lowest quintile, 99% of families of four are benefitted, while 81% of elderly households are benefitted.  The mean benefits for these households are $596/year and $138/year respectively.  These disparities show that living in a small or single person household contributes to a financial burden under the fee and dividend proposal.

2. Local Carbon Intensity of Electricity

Ummel also broke down the consumer habits of each income quintile into nine categories and determined the carbon tax burden for each category.  See Figure 2.  The largest single category for all but the top quintile is “utilities.”  Consequently, households that run on especially carbon intensive electricity would be disadvantaged by the carbon fee, while households running on clean energy would tend to benefit (Ummel, 2016, p. 34).  The importance of this factor is suggested by comparing Figures 3 and 4.  There is a rough correlation between the geographic distribution of the carbon intensity of the electricity supply and the financial impact on households in the lowest quintile.

3. Harsh Climates

Little need be said about this.  Households in especially cold or hot climates certainly will have higher utility costs than households in milder climates; however, in light of Figure 4, this factor does not seem to be particularly significant as many regions of the country experiencing harsh climates tend to enjoy

Figure 2 – National tax burden by quintile

 Note: From BEA NIPA Handbook (https://www.bea.gov/national/pdf/NIPAhandbookch6.pdf): “Private fixed investment (PFI) measures spending by private businesses, nonprofit institutions, and households on fixed assets in the U.S. economy. Fixed assets consist of structures, equipment, and software that are used in the production of goods and services. PFI encompasses the creation of new productive assets, the improvement of existing assets, and the replacement of worn out or obsolete assets.”

relatively greater benefits, e.g. New England, Florida, the Southwest, and Montana.  With inevitable changes to the climate, many climates will become harsher, increasing the importance of this factor.

4. Poor Insulation and Inefficient HVAC Equipment and Appliances

Again, it is obvious that households which live in poorly insulated housing and have inefficient HVAC equipment and appliances will bear a greater burden from a carbon tax as more energy will be required to achieve the same results.  This is a particularly significant problem for poor, low income households.  Such households often live in rental property, the owner of which is unconcerned about energy efficiency since the utilities are paid by the tenants.  Low income housing stock is significantly less efficient than average.  If low income housing were brought up to the national average, low income households would see a 35% reduction in their utility costs (Drehbol and Ross, 2016).

5. Transportation

The second largest category is “gasoline,” but while our common acquaintance with gasoline as a fossil fuel might lead us to think this would be the most significant factor in establishing a household’s carbon footprint, it actually makes up less than 25% of the total carbon footprint of U.S. households.  Still, if a household uses more gasoline than the national average, this factor will contribute to reducing the benefit they would receive from the carbon dividend and might, like other carbon-intensive factors, push them into a net loss. 

Figure 3 – Carbon intensity of energy supply

       

Figure 4 – Lowest quintile households benefited by fee and dividend

However, simply comparing gasoline costs between the lowest quintile and other quintiles might not be very revealing, since a disproportionate number of households in the lowest quintile likely will not have cars.  This means the gasoline costs borne by households in the lowest quintile will fall mainly on the car-owning households.

6. Indirect Costs

Utility costs and gasoline costs are “direct” energy purchases.  For the lowest income quintile, they make up 50% of the total costs.  The other categories are “indirect” energy purchases that appear as embodied energy in the goods and services that a household purchases.  Any household which purchases goods and services which are in total more carbon intensive than those purchased by the average household will find their net financial benefits lowered by these categories of expenditures, possibly pushing them into a net loss.  Because indirect purchases make up 50% of the lowest quintile’s energy purchases and even larger percentages of higher quintiles, these purchases are especially important in determining a household’s net benefit.  Indirect costs are the primary factor that burdens the higher quintiles and benefits the lowest income quintile, but lowest quintile households that purchase consumer products with an above average carbon footprint, nevertheless, will be penalized by these categories of purchases.

                                          

If a household remains well-enough below average in enough of the consumption categories, it will likely benefit from the fee and dividend mechanism, despite a high carbon footprint in other categories; however, if their consumption is in total above average across these categories, they will suffer a loss.  The worst-case scenario would likely be a single-person household, reliant upon carbon-based electricity, in a harsh environment, living in a poorly insulated house, with a long commute, purchasing unusually carbon-intensive goods and services.  Surely not every one of these conditions need hold to push someone into a loss, but various combinations of these factors could do so.  No single profile of a low-income household can tell the story for all 3.5 million households.

How significant is the burden?

Forty-seven percent of all households suffer a loss and their median loss amounts to $195/year.  Among the lowest income quintile, only 14% of households suffer a loss and their median loss is only $96/year or $8/month.  Consequently, the absolute burden is least for households in the lowest income quintile, but their median loss amounts to 0.79% of their income while the median loss nationally is only 0.25% of income.  So even as the lowest quintile is much more carbon virtuous than higher quintiles, their low income could make managing their loss nevertheless more difficult.  

There are additional considerations that are aggravating factors:

1. steadily rising fee,

2. limited conservation options for households in the lowest income quintile, and

3. the ability of higher income quintiles to achieve conservation savings.

CCL’s fees are proposed to begin at $15 in the first year and rise $10 in each subsequent year.  This means that the households (in all quintiles) that benefit will gain greater benefits as more revenue is collected, but burdened households will be made increasingly worse-off.  This could become a significant problem over time for households in the lowest quintile, unless those households are able to reduce their carbon footprint.  In many cases, we cannot reasonably expect this.  Furthermore, if households in higher quintiles are able to reduce their emission faster than households in the lowest quintile, less revenue will be collected without a comparable reduction of costs for the lowest quintile.  Households in the lowest quintile might be left behind in the race to reduce carbon emissions. 

There are several mitigating factors, however.  Ummel’s study does not seek to predict how the quintiles will fair in future years, but another study by Regional Economic Modeling, Inc. has projected the consequences of the fee and dividend nationally and regionally.  It provides some consolation that the fee and dividend will boost economic growth and create 2.1 million jobs in the first ten years.  These potentially could help reduce the harms across the board and soften the burden for the lowest quintile.  There are, however, more immediately recognizable mitigating factors:

1. the pass-through assumption,

2. under-reported high quintile expenditures,

3. price insensitivity among high income quintiles,

4. home ownership,

5. family wealth, and

6. temporary loss of income.

1. The Pass-Through Assumption

Perhaps most significant mitigating factor is that Ummel has assumed that 100% of the fee is passed on to consumers.  This undoubtedly will not happen.  For excise taxes generally, businesses commonly assume roughly 25% of the cost by reducing returns to capital and restricting or reducing wages (Tax Policy Center, 2017).  To some extent, as wages are reduced across all wage levels and as stockholders tend to be in higher income quintiles, the costs borne by the business will largely burden households in the higher quintiles.  So, the 14% of low-income households or 3.5 million households that are projected to lose financially is an overestimate.  Other analyses use different pass-through assumptions.  For example, the Department of Treasury’s Office of Tax Analysis assumes no costs are passed on to the consumer (Horowitz, 2017). 

2. Under-Reported Expenditures

Ummel also noted that there is a discrepancy between expenditures reported in the Bureau of Labor Statistics’s Consumer Expenditure Survey and the Personal Consumption Expenditures component of the U.S. Bureau of Economic Analysis’s national accounts.  The consequence of this is that reported expenditures are known to be underestimates of actual expenditures.  Utilities, gasoline, and a few other expenditures are reported more or less accurately, but other categories were under-reported by 47%.  Importantly, expenditures made by households in higher income quintiles are disproportionately under-reported.  Nonetheless, Ummel assumes that under-reporting is uniform across all income levels.  In a footnote, he recognizes that this will underestimate spending among the rich (Ummel, 2016, p. 4-6).  Underestimating these expenditures means that the aggregate revenue will be larger than estimated, and the dividend to the lowest income quintile also will be larger.  This is especially important as the underestimated expenditures are indirect expenditures and make up 60% of the expenditures of the highest income quintile.  Again, this will not only increase the dividend to all households, it will reduce the percent of lowest income households that are expected to be made worse off by the fee and dividend. 

3. Price Insensitivity

Perhaps one of the reasons that expenditures are under-reported by households in the higher quintiles is that they are less concerned about their expenditures than less well-off households.  Consequently, they do not notice those expenditures.  They also are likely to be less price sensitive than the less well-off.  They will be willing to make the same purchases even as prices rise somewhat.  According to Randy Schnepf of the Congressional Research Service, this is true for consumers making food purchases, “low-income consumers who spend a significant share of their household budget on food are likely to be … more responsive to price changes … than high-income consumers with lower food budget shares” (Schnepf, 2013, p. 28).  In the long run, this is very good news for households in the lowest income quintile.  That households in the higher quintiles will be relatively insensitive to price changes will mean that the lowest income households will be better able to keep pace with any conservation efforts made by those in higher quintiles.

4. Home Ownership

Not everyone who is in the lowest income quintile is poor.  Many people have substantial wealth in their houses.  Retirees who have paid off their mortgage can live comfortably with a relatively low income.  Others may have substantial savings conservatively invested.  While their income is low, they nonetheless could enjoy a lifestyle that involves higher than average expenditures and large carbon footprints.  Nationally, there are 6,896,000 homeowners with incomes less than $30,000 who are 65 years old or older (U.S. Census Bureau, 2015).  Some of these still might be carrying a mortgage, but the number is likely small.  While they may not have the security of people in the highest quintiles, their ability to afford the increased costs of a carbon fee might be similar to middle class households.  The existence of these households reduces the percent of households about which we should be acutely concerned.

5. Family Wealth

Like homeowners with low incomes, other households in the lowest quintile are not poor in the concerning sense.  They may be nominally distinct households, but benefit from their wealthy families.  Some college students would be good examples of these “households.”  While officially falling within the lowest quintile, they could have resources that allow them to make above average expenditures and thereby be among the households that are made worse off by the fee and dividend.  Roughly 20.5 million students attended college in fall of 2016.  A plurality of them came from the highest income quartile of families, i.e., families with an income of at least $116,000.  87% of high school students in the highest quartile went on to college (National Center for Education Statistics, 2017; Pell Institute, 2016).  Again, many “households” composed of college students from this stratum of society might be nominally in the lowest income quintile, but well-able to afford an increase in the cost of carbon intensive goods and services.

6. Temporary Loss of Income

The unemployment rate is currently 4.3% or 6.86 million people and the average length of unemployment is about 26 weeks.  Only a quarter of the unemployed remain unemployed for longer than 26 weeks (U.S. Bureau of Labor Statistics, 2017).  Loss of employment will surely send some number of households into the lowest income quintile for a time.  All other things being equal, they will likely not moderate their consumption habits significantly, if they have some savings to tide them over the period of temporary unemployment.  As household consumption correlates strongly with income, some number of them likely will be above the national average.  What this means is that some number of households with large carbon footprints will be in the lowest quintile only temporarily and will have greater resources in future years to recoup whatever burdens they experience during their weeks or months of unemployment.  These households will, in essence, be more likely to have high consumption habits and be more financially secure than those with chronically low incomes.  Recent research has revealed that in addition to people losing employment, income is often temporarily lost because of reduced hours during a business downturn (Morduch and Schneider, 2017).  The same situation faces small business owners suffering temporary losses.  We, of course, should be concerned about all of these groups, but their plight can be distinguished from households with chronically low incomes and for which we should be acutely concerned.

These six mitigating factors or categories of households all reduce the number of households and the burden they would suffer from the fee and dividend.  That is, each will reduce the percent of households in the lowest income quintile that are made worse off by the fee and dividend, such that 14% is an over estimate of households that will be significantly or chronically disadvantaged.  Additionally, the first three factors (the pass-through assumption and under-reported expenditures and price insensitivity by the higher income households) should increase the dividend for everyone and the mean net financial returns for the lowest income quintile.

Finally, data indicate that the burden among the lowest quintile will fall less on the lowest decile (Ummel, 2016 and Horowitz, 2017).

What can be done to relieve the burdens that remain?

Despite the expected reduction in the number of households that will suffer a net financial loss and the expected reduction in the size of that loss, some households in the lowest income quintile will continue to suffer losses.  Consequently, it will be important to find ways to relieve those burdens.  One simple way would be to modify the formula for distributing revenue.  CCL is promoting a modified per capita distribution (one share for each adult and one-half share for each child up to two children per family).  CCL believes the simplicity of this formula will be a political selling point, but it tends to burden single person households.  Other distribution formulas, nearly as simple, could be implemented that would protect those households.

Another significant method to protect people in the lowest quintile would be to reduce their carbon intensive expenditures.  As the largest single category of expenditures is utilities, significant relief can be achieved by de-carbonizing electricity generation.  This is precisely what the carbon fee and dividend is most likely to accomplish.  With rising costs for generating coal and gas fueled electricity, wind, solar, and other clean energy sources will gain greater and greater market share.  Already, coal-fired power plants are closing around the country and are announced to be retired sooner than initially planned.  If, ideally, all electricity was generated from clean sources, the carbon-based expenditures of the lowest quintile would be reduced significantly.  As this expenditure is proportionately larger than expenditures by higher income households, the net benefits to the lowest income households would further improve.  As electricity becomes cleaner, the carbon fee burden associated with consumer goods would also fall.  Businesses will seek to reduce their production costs by making use of low-carbon inputs, thereby reducing the cost of the fee to consumers.  So, the success of the fee and dividend would reduce both the fee and the dividend, essentially making it less and less relevant to household finances.  The problem of the steadily rising fee would be counter-acted by the reduced number of goods and services to which the fee applies.

The increased cost of gasoline production would stimulate more fuel-efficient transportation.  Already, hybrids and electric vehicles are gaining market share.  Countries such as Norway, India, China, and France have already announced intentions to promote or move entirely to electric vehicles. These are, of course, foreign markets, but they indicate the direction that the automobile industry is heading.  Virtually all major auto manufacturers are now producing an all-electric car.  While the upfront cost of new hybrid or electric vehicles will be beyond the reach of most all low-income households, more efficient vehicles in the used car market will become within reach.  As these vehicles appear on the market, the carbon-intensity of transportation expenditures by the lowest quintile will fall.  Here, too, the fee and dividend is designed to make itself obsolete.

There are a number of ways to reduce the cost of the fee to the lowest quintile that lie outside the fee and dividend proposal:  local, state, and federal support for energy efficiency upgrades for affordable housing, support for “Energy Star” appliances, “cash for clunkers” programs, and progressive utility rate structures are a few obvious tools.  Money for these programs could be raised by allowing households to voluntarily decline their dividend.  Checks would come to them with a notice that if they chose not to cash the check in a specific time period, the money would be used to support energy efficiency programs or perhaps research and development into alternative fuels.  Given that most of the revenue generated would come from the highest quintiles and that these checks would make up typically only about 0.2% of their annual income, many well-off households likely would be willing to make this contribution.

Finally, the costs and benefits examined here are only financial.  De-carbonizing our economy will benefit vulnerable communities located near polluting power plants.  This is a significant concern among environmental justice advocates.  Cap-and-trade carbon pricing plans do not address this problem.  Under a cap-and-trade system, polluting power plants can purchase off-sets and continue to operate polluting plants usually affecting poorer neighborhoods.  In contrast, a fee and dividend plan puts market pressures on all fossil fuel plants equally, thereby promoting healthier conditions for vulnerable communities.  The study conducted by Regional Economic Modeling, Inc. for CCL found that CCL’s fee and dividend plan would prevent 230,000 premature deaths in the courses of 20 years. 

While we cannot expect that all households within the lowest quintile will be benefitted by CCL’s carbon fee and dividend, it is clear that the proposal is extremely progressive and that the estimate that 14% of the lowest quintile will suffer a burden is an overestimation.   There are clearly ways in which the households in the lowest quintile can be protected.  Among these is simply the fact the fee and dividend plan is designed to make itself obsolete, particularly in those expenditure categories that are most damaging to the lowest quintile.  

Sources

Drehbol, Ariel and Lauren Ross, “Lifting the High Energy Burden in America’s Largest Cities: How Energy Efficiency Can Improve Low Income and Underserved Communities,” American Council for an Energy-Efficient Economy, April 2016.

Horowitz, John, et al., “Methodology for Analyzing a Carbon Tax,” Working Paper 115, Office of Tax Analysis, U.S. Department of Treasury, January 2017.

Morduch, Jonathan and Rachel Schneider, The Financial Diaries: How American Families Cope in a World of Uncertainty, Princeton: Princeton University Press, 2017.

National Center for Educational Statistics, “Fast Facts,” U.S. Department of Education, 2017 https://nces.ed.gov/fastfacts/display.asp?id=372, retrieved 6/26/2017.

Nystrom, Scott and Patrick Luckowk, “The economic, climate, fiscal, power, and demographic impact of a national fee-and-dividend carbon tax,” Washington, D.C., Cambridge, Mass.:  Regional Economic Modeling, Inc. and Synapse Energy Economics, Inc., June 9, 2014.

Pell Institute, “Indicators of higher education equity in the United States: 2016 historical trend report,” 2016, http://www.pellinstitute.org/downloads/publications-Indicators_of_Higher_Education_Equity_in_the_US_2016_Historical_Trend_Report.pdf, retrieved 6/26/2017.

Schnepf, Randy, “Consumers and food price inflation,” Congressional Research Service, Sept. 13, 2013. 

Tax Policy Center, “Briefing Book,” Urban Institute and Brookings Institution, 2017, http://www.taxpolicycenter.org/briefing-book/who-bears-burden-federal-excise-taxes, retrieved 6/26/2017.

Ummel, Kevin, “Impact of CCL’s proposed carbon fee and dividend policy: A high-resolution analysis of the financial effect of U.S. households,” prepared for Citizens’ Climate Lobby, Working Paper v1.4, April, 2016.

U.S. Bureau of Labor Statistics, 2017, https://www.bls.gov/home.htm, retrieved 7/6/2017.

U.S. Census Bureau, “America’s Families Living Arrangements,” 2016, https://www.census.gov/data/tables/2016/demo/families/cps-2016.html, retrieved 6/26/2017.

U.S. Census Bureau, “American Housing Survey,” 2016, https://www.census.gov/programs-surveys/ahs/data/interactive/ahstablecreator.html#?s_areas=a00000&s_year=n2015&s_tableName=Table1&s_byGroup1=a1&s_byGroup2=a1&s_filterGroup1=t1&s_filterGroup2=g1, retrieved 6/26/2017

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[*] I would like to thank Rebecca Schaaf, Ellyn Dooley, David Brittain, and Danny Richter for editorial comments and general guidance.  

Catching Up

It has been quite some time (since June 2015) that I posted anything to this blog. I was for most of that time on sabbatical, drafting a book on Indian Buddhism.  Consequently, my writing efforts were directed away from reviewing books and toward writing one.  Since coming back from the sabbatical, I have not recovered my habit of reviewing the books I read; however, my hope is to recover that habit.  To catch up, though, I merely plan to record here a number of the books that I read over that last few months.  After all, this blog is primarily a means to record for myself the books I have read. Perhaps one day, I'll return to the most important ones and provide reviews.

Powell, James Lawrence, <i>The Inquisition of Climate Science</i>, N.Y.: Columbia University Press, 2001.  This work is a brief (192 page) book describing the concerted efforts by climate change deniers to sew doubt about the fact and effects of our changing climate.  It also recounts many of the highest profile attacks on climate scientists by deniers.

Stern, Nicholas, <i>The Economics of Climate Change: The Stern Review</i>, Cambridge, U.K.: Cambridge University Press, 2006.  This work is a major landmark (if not the major landmark) in the literature related to the economics of climate change.  It has been criticized for employing an inordinately low discount rate, but this mainly reflects a moral judgement regarding the importance of the well-being of future generations.

Nordhaus, William, <i>The Climate Casino: Risk, Uncertainty, and Economics for a Warming World</i>. New Haven, Conn.: Yale University Press, 2013.  The importance of this work is perhaps second only to <i>The Stern Review</i> with regard to the economics of climate change.  William Nordhaus (not be confused with his son Ted Nordhaus) is an eminent environmental economist.  His analysis of the economic consequences of climate change and climate change mitigation strategies differs somewhat from Nicholas Stern's analysis.  Nordhaus applies a higher discount rate making which has the consequence of estimating a higher relative cost for mitigating climate change and he is more sanguine regarding future generations' abilities to adapt to climate change.  Nonetheless, he strongly advocates a carbon tax and stresses the importance of acting quickly and decisively to reduce the emission of greenhouse gases.

Jamieson, Dale, <i>Reason in a Dark Time: Why the Struggle Against Climate Change Failed -- and What It Means for Our Future</i>, N.Y.: Oxford University Press, 2014.  This work, by a professor of philosophy at the University of Colorado.  Jamieson provides and account of how governments have failed to address climate change in a time frame adequate to preserve the kind of planet that existed prior to the industrial revolution.  He acknowledges that we live in the Anthropocene Era, viz., a geological era in which the actions of human beings are having a determining effect on the natural history of the planet.  He also provides chapters on the ethics of responding to climate change.

Medvedev, Zhores A., <i>The Rise and Fall of T.D. Lysenko</i>, I. Michael Lerner, trans., N.Y.: Columbia University Press, 1969.  This is an account of the period from 1929-1961 during which the influence of T.D. Lysenko distorted Soviet genetics and agricultural sciences.  The account is written by a Soviet scientist who had first hand experience with the internal struggles to maintain the integrity of Soviet science.

Joravsky, David, <i>The Lysenko Affair</i>, Cambridge, Mass.: Harvard University Press, 1970.  Joravsky is an American historian, emeritus professor at Northwestern University specializing in Soviet studies.  This work is recognized as among the very best accounts of the Soviet science under the influence of T.D. Lysenko.

Wood, Mary Christina, <i>Nature's Trust: Environmental Law for a New Ecological Age</i>, N.Y.: Cambridge University Press, 2014.  I consider this book the best of the year.  It describes the decline of environmental regulations established by the promising environmental laws of the 1970s.  According to Wood, environmental regulatory agencies have become captured by the industries that they were designed to regulate.  Consequently, their primary role now is to approve exceptions to environmental restrictions -- essentially blessing the very damages they were designed to protect us from.  Wood argues that our best response to this is to employ trust law to require Congress and the executive branch to protect the public's interest in a livable environment.  Basic to this approach is the idea that the natural world is like a trust, with government serving as its trustee on behalf of current and future generations.

Speth, James Gustave and Peer M. Haas, <i>Global Environmental Governance</i>, Washington D.C.: Island Press, 2006.  This work provides a brief history of the international efforts to reach an agreement on how to protect the climate from anthropogenic changes.

Kolbert, Elizabeth, <i>Field Notes from a Catastrophe: Man, Nature, and Climate Change</i>, N.Y.: Bloomsbury, 2006.  This work is among the most important of several books that were published around this time on the contemporary and pending damages that climate change presents.  Ten years on, it is depressing to see how little has been accomplished to address the problems that Kolbert describes.

McKibben, Bill, <i>Eaarth: Making Life on a Tough New Planet</i>, N.Y.: N.Y.: Henry Holt and Co., 2010.  Bill McKibben may be remembered as the most important voice warning Americans about the damage that we are doing to the climate.  His work <i>Eaarth</i> asserts that our actions have already ensured that our planet will become qualitatively different from the one which has been our home.  Thus, he slightly alters the spelling of the planet's name.  His description of unavoidable changes are clear and illuminating, fully justifying his rather radical observation.  McKibben suggests ways in which we might alter our lifestyles in a way that will allow us to live "lightly, carefully, and gracefully" such that we can live reasonably well despite the terrible consequences of our past actions.

Brechin, Gray, <i>Imperial San Francisco: Urban Power, Earthly Ruin</i>, Berkeley: University of California Press, 1999.  This work is a history of the city of San Francisco and the social, political, and particularly the environmental consequences of its development.  The story begins with the devastation produced by mining gold and clear cutting California's forests and concludes with the establishment of the academic institutions that developed nuclear weapons.  It provides an unflinching critique of the consequences of the unrestrained economic exploitation of people an nature for private gain.

Shelley, Mary, <i>The Last Man</i>, London: Henry Colburn, 1826.  This little-known novel by the author of <i>Frankenstein</i> describes in three volumes the extinction of humanity as a result of a virulent plague.  The story come to us from 1818 when visitors to a "gloomy cavern of the Cumaean Sibyl," where they find written prophecies, often of events now just past.  Among the prophesies is an account of the last man to perish in the world-wide plague.  Though set in the last decade, the world Shelley describes is little different from her own time.  It is without electricity or internal combustion engines and the struggle between monarchists and republicans is only now becoming resolved in favor of republicanism.  The first volume works primarily to introduce and develop the novel's characters.  Its story mostly concerns interpersonal relations and political ambitions.  The plague makes no appearance.  Indeed, appart from passing mention, it only appears one third of the way through the second volume.  From there the novel describes the epidemic decimation of England.  The third volume recounts the surviving remnants of the country trekking to Switzerland where they hope to find refuge from the plague.  Ultimately three survivors continue on to Rome.  The novel ends with the last man determining to sail a bark along the oceans' shores in search of another survivor.  "Thus around the shores of deserted earth, while the sun is high, and the moon waxes or wanes, angels, the spirits of the dead, and the ever-open eyeof the Supreme, will behold the tiny bark, freighted with Verney--the LAST MAN."  If the Victorians were obsessed with death, Shelley's <i>The Last Man</i> is an extreme expression of this obsession.  Not only does every character die, but the entire human race is extinguished.  The early volume is graced with the romantic prose of the time and peppered with reflections on life, love, and death, but once the plague appears, there is hardly a page in the novel which is not a meditation on mortality.

Tenth International Climate Change Conference / Heartland Institute -- Washington, D.C.: June 11-12, 2015

On Thursday, June 11 and Friday June 12, a conference on climate change was held in Washington, D.C., sponsored by the libertarian think tank, The Heartland Institute.  It brought together most of the world's luminaries of a community of people known as "climate change skeptics" or "climate change deniers."  Given the place of the Heartland Institute in the skeptic/denier community and the people in attendance, the claims and arguments presented at the conference can be understood fairly as the current leading opinions among skeptics/deniers.   Below is my attempt to encapsulate the most important claims expressed at the conference.

By my estimate, there were approximately 800 people in attendance.  So one should not assume that everyone there accepted all of the claims below, but disagreement with these claims was not in evidence and many of these claims received enthusiastic applause.  I have attempted to present these claims in as fair and dispassionate language as possible, though many of the speakers employed ad hominem and what I suspect would have been admitted to be hyperbolic rhetoric -- often for the purpose of entertaining the audience.  It is, however, important to understand the conference's claims in as charitable way as possible to ensure that any analysis or critique of its claims are valid.

I categorize the claims into four categories: denialism, skepticism, energy policy, and imputed motivations.  In future posts, I will discuss the plausibility of these claims and the cogency of the arguments made in their favor.  A few deserve serious attention.  Many others are frivolous.

Denialism:  There has been no significant warming of the planet due to human causes.

• There was a "little ice age" and a "medieval warming period" evident in Europe and Greenland that prove a natural fluctuation of temperature independent of CO2 concentrations.
• There has been no warming of the planet for the past 15 or more years.
• There has been no increase of extreme weather, particularly, storms, floods, droughts, and wildfires, for the past decade.
• Actions to reduce CO2 emissions will have no significant effect on global temperatures.
• Coal is the cleanest energy source we have.

Skepticism:  Climate science worldwide has degenerated into a condition that is similar to Soviet agricultural science under the sway of Trofim Lysenko.

• Climate scientist routinely "fiddle"with data to produce desired results.
• Michael Mann's "hockey stick" graph is a product of falsified data.  This has been demonstrated by the hacked East Anglia University, Climate Research Unit emails.
• NOAA's recent adjustment to sea surface temperatures, eliminating what had been thought of as a "pause" in temperature increase, was a cynical act of falsifying data.
• The U.S. surface temperature record is artificially high due to poorly sited thermometers (the urban heat island effect).
• Apparent increases in rainfall in the Northeast U.S. and to a lesser extent elsewhere in the U.S. are a product of a change in rain gauge technology.
• Projections from computer models have been incorrect and are fatally subject to assumption biases.
• The satellite record of temperatures coming out of Alabama University a Huntsville is the best (perhaps the only reliable) record of global temperatures.
• Serious-minded scientists are professionally punished for raising doubts about climate change and suffer public ridicule.

Energy Policy:  Economic growth driven by fossil fuel development will enrich the planet and provide the resources necessary to adapt to any changes to the climate in the unlikely event that changes take place.

• Raising the price of energy will damage the economy and further impoverish the world's poor.
• Commonly, benefit-cost analyses of CO2 emissions inflate the costs and neglect the benefits.
• Increased CO2 levels are good for life (particularly plant life) on the planet.
• The EPA should be abolished and replaced with state regulatory agencies.
• The court ruling that CO2 is a pollutant must be overturned or the legislation must be amended to have this effect.
• Renewable energy will never become economically competitive without government subsidies.

Imputed Motivations:  There is an alliance of various groups with various motives behind the warnings about dangerous climate change.

• The motive of environmentalists is religious.
• The motive of politicians and bureaucrats is political control.
• The motive of green businesses is to ensure government subsidies to enrich green investors.
• The motive of government and academic scientists is careerism.

The Pursuit of Happiness: An Economy of Well-Being / Carol Graham -- Washington, D.C.: Brookings Institution, 2011

Economists have been measuring the gross national product and gross domestic product since the middle of the 20th century. These measures often are thought to indicate the "health" of the economy and moreover the aggregate well-being of the nation's people; however, almost as often, these conclusions have been challenged. In a speech on March 18, 1968, Robert Kennedy, now famously said that the gross national product

counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities. It counts...the television programs which glorify violence in order to sell toys to our children. Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile. And it can tell us everything about America except why we are proud that we are Americans.

It is surprising, then, that it was only in the last 10-20 years that economists have begun seriously studying an alternative to GNP as a measure of social well-being. In The Pursuit of Happiness, Carol Graham reviews much of this literature and poses important questions as to how and whether happiness research can inform policy debates.

In the second chapter, Graham recognizes the difficulty we face in defining happiness. A number of similar concepts cloud the issue: well-being, satisfaction, contentment, and pleasures of various sorts are among many such concepts, and measuring them involves measuring a number of different factors: health, family, friendships, security, income, freedom, education, expectations, etc. Any of these factors can be complicated by temporary changes in a person's life circumstance. Furthermore, Graham plausibly asserts that individuals have different baseline dispositions toward happiness.

Graham distinguishes two significant forms of happiness recognized in the recent economics literature, hedonism and eudaimonism, roughly labeling them Benthamite and Aristotelian respectively. Labeling the former Benthamite is apt. It refers to simple pleasure or hedonic utility. The latter, while not completely mis-attributed to Aristotle, misses an important aspect of Aristotle's view of happiness. Graham first describes eudaimonia as related to "meaning" or "life evaluation," applying the cooncept to people who establish long-term plans and take steps to complete those plans. A critical component of this is "agency," or the ability to determine the outcome of one's life plans. As the work proceeds, agency becomes the tail which wags the dog in Graham's "Aristotelianism."

Certainly, Aristotle's notion of happiness involves agency. For Aristotle, a happy person is someone who exercises the uniquely human capacity of reason to shape the whole of his or her life; however, Graham's Aristotelian happiness underplays the importance of makarios, i.e., divine, or god-given happiness. Moreover, the etymology of eudaimonia combines the Greek words for "good" and "in dwelling spirit" -- a being halfway between the gods and humans (from which we get our word demon). For Aristotle, happiness, while it certainly is something we work to create by exercising our uniquely human reason, it is also something that happens to us; it is god-given or is a product of being possessed by a good demon. Furthermore, the highest happiness for a person is something that can be measured only after one's full life has been lived and one's posthumous reputation has been assessed. This is certainly a minor academic objection, but overlooking (or underplaying) Aristotle's concept of happiness in its fullness will lead the economics of happiness to policy agendas that overemphasize the autonomy of individuals and underemphasize true human needs.

To better understand policy goal options, one should distinguish three forms of happiness, Benthamite hedonism, Graham's Aristotelian eudaimonism (which might simply be called "liberty"), and the more fully Aristotelian happiness of a good life. Graham's review of happiness surveys makes reasonably clear that Benthamite hedonism is not an adequate policy goal. Our overall happiness requires more than obtaining day-to-day pleasures. By and large, we also require accomplishments that we can trace to our own choices and actions; consequently, we require the social conditions which are conducive to the exercise of our capacity to chose and pursue our own conception of a good life. We require, in the terminology of John Rawls, basic liberties; however, it is doubtful that this will be enough to promote happiness in its fullest sense.

Graham's title The Pursuit of Happiness comes, of course, from the American Declaration of Independence, indicating Carol's bias in favor of a liberal state -- one which is concerned with creating opportunities for happiness where the individual is at liberty to pursue whatever reasonable lifestyle he or she chooses as opposed to a state that seeks to equalize the outcome of the distribution of benefits and burdens. Such a liberal state is clearly an advance over an autocratic state which narrows the life choices of its citizens for the benefit of a ruling minority, but allowing over-wide latitude in life choices has three significant drawbacks. It may allow self-destructive natural temptations to compromise true human needs, it does not recognize the inability of citizens to be fully informed about the consequences of their choices, and it can result in what could be called happiness market failures.

Proper policy decisions might require a recognition that some conceptions of a good life might be objectively preferable to others and that our natures, circumstances, and rational individual actions may sometimes lead us away from the objective good. The remedy would seem paternalistic to the libertarian (or even to the classical liberal), but a way of life endorsed by state policy need not be particularly limiting and it could be justified by appealing to deep psychological and biological needs. Even John Rawls, for example, recognizes that his liberal principles of justice are only apropos to a society that has reached a certain level of development, but the question that Aristotle's view of happiness raises is whether a more communitarian society should be the object of public policy.

My own preferences would be largely to follow Rawls, and protect liberty and equal opportunity before establishing policies that would maximize basic goods for the least well off. As I argued in my dissertation, this alone will result in a fairly thorough-going egalitarianism. Still, I'm not entirely convinced that placing boundaries on the range of permissible conceptions of the good is only relevant for societies in deep poverty or to exclude unreasonable conceptions of the good. The Kantian notion of true human needs obviously applies to conditions of dire poverty, but I'm not entirely certain that it does not reach further into the lives of people who on first glance have all that they need. This is not to suggest that I am especially concerned about what Graham calls the plight of "frustrated achievers" or the "miserable millionaire." As far as I'm concerned, the misery of the millionaire is his or her own damn fault.

According to the happiness literature cited by Graham, an egalitarian society is more conducive to happiness than a society characterized by vast disparities of wealth and I would add that the egalitarian society more effectively respects the full dignity of persons. A truly happy society must provide for equality of opportunity, and mitigate tendencies toward unequal outcomes; but assuming these conditions, a deeper understanding of human nature and the nature of happiness might restrict conceptions of the good life beyond what would be chosen by people without full information, by people without a superhuman ability to withstand temptation, and by people who are not so selfless as to voluntarily accept limitation to avoid happiness market failures. Broadly expressed, an egalitarian society that ensures equality of opportunity may still need a degree of communitarian organization to respect the contours of human nature.

The third chapter of The Pursuit of Happiness is essentially a literature review of happiness economics. Its organization is somewhat confusing and it presents the findings without assessing the validity of the studies. Of course, to do so would have significantly enlarged the book, but at 164 pages (including notes and index), adding a bit more about the validity of the studies would have helped. Hopefully, Graham has carefully examined the studies and is only including those that are most reliable. In any case, one should be extremely cautious about accepting the conclusion of happiness surveys due to the complexity of the concept. Time and again, one is led to wonder if one or another confounding factor is really responsible for results attributed to the independent variable. Even more often, correlations are observed that may be merely a coincidental product of a large data set.

The fourth chapter is entitled, "Adaptation and Other Puzzles." Here Graham demonstrates a good understanding of the concerns that I have raised in this review. Graham understands, perhaps was well as anyone, the difficulties facing happiness economics.

The final chapter describes the how we might incorporate a "gross national happiness" measure into existing social and economic measures to provide a better understanding of the lives of people for making policy decisions. As difficult as measuring happiness is, a "GNH" measure would certainly be worthwhile, if only to de-thrown unlimited economic growth from our policy objectives.

Overall, The Pursuit of Happiness is a valuable contribution to an emerging field within economics. It will probably not become seminal, but hopefully it will prompt further discussion of its important topics.

The Politics of Climate Change / Anthony Giddens -- Cambridge, U.K.: Polity, 2009

The evidence is now quite clear: the global climate is changing rapidly and the consequences will be dire for vulnerable populations around the world. The younger members of our society may even live to see the complete collapse of civilization if the worst case scenarios pan out. In light of this, it is amazing that the political will to mitigate and/or adapt to climate change is so weak. According to Anthony Giddens, this is because the dangers of climate change remain a "back of the mind" issue, easily displaced by other more immediate concerns. Consequently, in The Politics of Climate Change, Giddens hopes to present a blueprint for creating "a politics of climate change" which will be capable of addressing the dangers we face.

Broadly speaking, Giddens's political programme relies on mobilizing existing social, political, and economic institutions. He is critical of the "Green movement" as exemplified by various Green Parties. Giddens complains that they have adopted an oppositional stance which will merely alienate the leaders of the institutions that need to be brought around to mitigate and adapt to climate change. This criticism makes the reasonable assumption that existing institutions will remain the governing force through the next century and will need to be brought into our efforts to address climate change.

Giddens's dismissal of the Green movement, however, gives too little weight to the view that the Green movement is the only social force that will consistently recognize the full dangers of climate change and keep the issue on the public agenda. This highlights the greatest weakness in The Politics of Climate Change: Giddens's politics of climate change are too divorced from a sociology of climate change which is the contribution that the Green movement makes to the discussion.

Giddens's work is nonetheless an important element in the discussion. Reading his work in conjunction with John Urry's Climate Change and Society and Pat Murphy's Plan C: Community Survival Strategies for Peak Oil and Climate Change provides a more holistic picture of how we might be able to address the dangers of climate change. Oppositional politics and the creation of low carbon alternative communities that model new, more benign institutions, have an important place in the politics of climate change; but Gidden's is correct that these new political and social institutions would do well not to completely alienate existing power structures. Opposition politics must still create ways that existing institutions can participate in the effort to move to a low carbon society.

Giddens's main prescription for building acceptance within existing institutions is to seek "political and economic convergence" between climate change mitigation and adaptation goals and other values held by the existing sources of political power. A prime example of this is energy independence. Giddens recognizes that it behooves the environmentalist movement to emphasize the importance of generating renewable (low carbon) domestic energy, not simple for the purpose of mitigating climate change, but to free the country from dependence of foreign oil. Institutions unconcerned about climate change can then be enlisted in the effort for reasons other than mitigating climate change.

The strongest element of Giddens's work is his treatment of economic strategies for reducing carbon emissions. Beginning with the principle that the polluter should pay for the costs of pollution, he makes a case for implementing a carbon tax. This is, according to Giddens, preferable to a cap and trade system or carbon rationing. These other methods are not without merit, but Giddens finds that cap and trade systems have not really achieved their purpose. A more rigorous system will be required to reduce emissions. Carbon rationing, while more rigorous, is, in Giddens's view, "impractical and unfeasible."

Giddens's attempt to directly address the requirements for creating a political consensus in favor of addressing climate change is most admirable and most of his observations and arguments are weighty and cogent. It is especially important that voices like his, which are firmly within the social and political establishment, be heard. He gives great legitimacy to positions and policies that otherwise would be dismissed as coming from the fringe. At the same time, his call to work with and from within existing institutions needlessly narrows the sphere of action. There will always be a tension between forces for change from within and from without existing institutions, but limiting the political programme to one or the other is not likely to yield the urgent and drastic change that is now required.

The Great Global Warming Blunder: How Mother Nature Fooled the World's Top Scientists / Roy W. Spencer -- N.Y.: Encounter Books, 2010

Lately, I've read several books by authors who deny either the reality, the causes, or the dangers of climate change. I have sought out the most well-respected denial authors to be sure that I have seen the best arguments. They run the gamut from patently false to cleverly specious. Several climate deniers clearly seem intent on disregarding science and promoting confusion in an effort to advance their economic or political goals. It is not clear to me that these are Roy Spencer's motives. He seems quite sincere, if perhaps a little over confident; however, there is circumstantial evidence that his scientific judgement is clouded by other motives. In any case, his scientific research is highly suspect.

In The Great Global Warming Blunder Spencer writes, "I find it difficult to believe that I am the first researcher to figure out what I describe in this book. Either I'm smarter than the rest of the world's climate scientists -- which seems unlikely -- or there are other scientists who also have evidence that global warming could be mostly natural, but have been hiding it." What escapes Spencer is that he simply may be wrong and that the rest of the world's climate scientists understand that he is wrong.

To his credit, Spencer addresses the most important questions for the science of climate change: what temperature feedbacks exist and are they on balance positive or negative? Spencer's answers depend on his assessment of the effects of clouds and cloud formation. It is in "Chapter 5: How Mother Nature Fooled the World's Top Scientists" that he presents his case. While his book is written for a lay audience, Chapter 5 necessarily becomes a bit more technical. It is not, however, by any stretch of the imagination, of the quality of professional peer reviewed science. As such, Spencer fails to make a clear case for his lay audience and provides insufficient detail to withstand scientific scrutiny.

The chapter is of a piece with a number of articles by Spencer which the scientific community has panned. Most recently, Spencer published an article in the journal Remote Sensing which was trumpeted by him, his University, the right-wing blogosphere, and the traditional media. Forbes Magazine wrote that Spencer's data "blow a gaping hole in global warming alarmism." In contrast, Spencer's article was soundly refuted by climate scientists. The certainty of the refutation prompted Wolfgang Wagner, the editor-in-chief of Remote Sensing, to revisit his decision to publish it. Upon review, he determined that it was not of publishable quality and, taking responsibility for his lapse in editorial rigor, Wagner resigned his editorship.

In his resignation announcement, Wagner wrote that there were "fundamental methodological errors" and "false claims" in Spencer's paper, and that "comparable studies published by other authors have already been refuted in open discussions and to some extent also in the literature, a fact which was ignored by Spencer and Braswell in their paper." He concluded, "I perceive this paper to be fundamentally flawed and therefore wrongly accepted by the journal." While it is not unusual that scientific papers meet criticism after publication, the resignation of an editor-in-chief is quite unusual. This underscores the weakness of Spencer's research.

There is, however, much in The Great Global Warming Blunder that has little to do with climate science and a lot to do with economics and politics. The views that Spencer presents are familiar: (1) free market economic policies will produce sufficient wealth to deal with whatever future problems climate change might pose and (2) regulation of greenhouse gas emissions will cripple economies and prevent us from alleviating more pressing humanitarian problems. These arguments fail for two reasons.

First, they are predicated on an economic theory that is controversial in the best of times. Since the onset of the 2008 depression, the prospect of economic growth under any economic regime appears doubtful, particularly as the era of cheap energy is over. Employing the world's current wealth to mitigate the effects of global warming may be our first and last chance to escape disaster.

Second, the arguments against addressing global warming now require that the effects of climate change will not be as damaging as the scientists believes. If the widely-reviewed scientific research is correct, then no amount of accumulated wealth will be able to reverse the disastrous feedbacks that are expected from a 3 degree centigrade increase in the world's surface temperature. (For an excellent, well-researched description of the consequences we can expect from rising temperatures, degree by degree, see Mark Lynas's Six Degrees: Our Future on a Hotter Planet.)

Spencer asks us to risk everything on his faith in free markets and his widely criticized research. The real "great global warming blunder" would be if we were to listen to Spencer and delay action to mitigate global warming.

The Kingdom of God Is Within You: Christianity Not as a Mysitical Teaching But as a New Concept of Life / Leo Tolstoy -- Farrar, Straus & Cudahy, 1961

Leo Tolstoy's reputation as a novelist much overshadows his reputation as an author of non-fiction, but a great deal of his literary output is non-fictional. He was particularly concerned in the later stages of his career to express his views on religion and non-violence. His two most important works in this regard are My Religion also known as What I Believe and The Kingdom of God Is Within You. What he attacks in Kingdom gives ample reason for understanding why his views have been dismissed.

The work begins with an exposition of what Tolstoy thought was the central philosophy of Christ, expressed in Mathew 5:39, "I say unto you, That ye resist not evil: but whosoever shall smite thee on thy right cheek, turn to him the other also" (KJV). From this, Tolstoy constructs the moral philosophy of "non-resistance to evil:" a radical rejection of violence in all of its forms. Not only does this imperative proscribe serving in the army, it rejects serving as a police officer, and enacting punishments of any kind.

Tolstoy recognizes that all governments depend upon the threat of punishment and so consequently, he rejects government. Equally, he criticizes revolutionists inspired by a sense of justice to commit acts of violence, but he saves his deepest scorn for leaders of the Christian churches, who he sees as distorting and rejecting true Christianity. As worldly powers, Christian churches have made accommodations with secular powers and even vigorously endorsed various forms of violence at least since Constantine. His criticisms go beyond established institutions and their leaders as Tolstoy hold accountable upper and middle class individuals who accept the benefits of violent economic, social, and political arrangements.

With the depth and breadth of his critique, it is no wonder that his books were banned by Czarist Russia, and that he found no meaningful support from other governments, revolutionary socialist parties, the Christian church, or many people in the literate classes. His reputation as a "crank" was all but assured by his uncompromising attachment to the principle of non-violence.

Nonetheless, it is difficult to find fault with the basic thrust of his arguments. If we are to understand the message of Christ to be of historical significance, it must depart from the political and moral compromises that putatively Christian institutions have made. Such institutions could have engaged in exactly the same behavior as they have while embracing any number of secular ideologies, and had Christ's message been consistent with these actions and arguments, his contribution to the history of moral ideas would not be noteworthy.

If there is a weakness in Tolstoy's critique of law and punishment, it lies in his failure to recognize the possibility that self-imposed laws can be legitimately enforced by self-imposed punishments. A truly democratic society may adopt rules for behavior and employ punishments to guard against the weakness of will that characterizes us all, though one might argue that each person must willingly accept the legitimacy of the governing institution.

In defense of Tolstoy's critique of even ostensibly democratic governments, one can point out that no actual government is born of institutions that can confer truly democratic legitimacy, certainly not the U.S. government with its plutocratic electoral system. Consequently, the legitimate use of violence by a government can only occur under hypothetical circumstances.

Tolstoy's moral demands are strict, but they establish an ideal that deserves the deepest respect.

Water: The Epic Struggle for Wealth, Power, and Civilization / Steven Solomon -- NY: Harper Collins, 2010

My habit is to read books cover to cover. I feel a certain obligation to an author to treat his or her work as a whole, but in the case of Water: The Epic Struggle for Wealth, Power, and Civilization, I decided to read only the last 130 pages of this nearly 500 page book. These pages were titled, "The Age of Scarcity." Solomon's interesting treatment of the planet's unfolding water crisis made me wish I had time to read his earlier chapters on water's role in the history of civilization, but time is fleeting, so I contented myself with that portion of his book that seemed most pressing to read.

The world currently faces three enormous problems: climate change, the depletion of conventional oil reserves, and the depletion of water resources. Each interacts with the others to complicate solving (or even mitigating) any of these problems. Solomon's section "The Age of Scarcity" is a detailed examination of many of the issues we face regarding the depletion of water resources.

Most critical are the pressures faced by water poor countries which also turn out to be among the poorest countries in the world. There are exception to this, of course, mostly oil producing countries, but virtually no country is untouched by the unfolding water shortage, and some -- particularly China and India -- are rapidly moving toward water poverty. Both countries are planning massive water diversion projects to support industrial and agricultural development and are rapidly depleting their ancient ground water. Their impending water shortages are likely to put a significant break on their vaunted economic futures.

Such massive diversion projects are consistent with, but larger than, projects previously employed by other countries to manage water. In nearly every instance, these projects have resulted in the destruction of water resources and environmental disaster. Among the most dramatic was the diversion of water for irrigation in Central Asia which destroyed the Aral Sea. Less obvious was the loss of Nile water due to evaporation from the reservoir created by the Aswan Dam.

It is noteworthy that the Nile is currently completely exploited. Nile water no longer flows into the Mediterranian Sea. With the predicted increase in Egypt's population (along with the populations of other Nile basin countries) political turmoil is bound to erupt, both between Nile basin countries and within domestic populations. Such turmoil will not be unique. The shrinking of Lake Chad due to climate changes already has resulted in significant political turmoil in Africa and the melting of Himalayan glaciers could cause even greater turmoil in south Asia. Solomon describes the decades of war between the Israelis and their Arab neighbors as significantly rooted in the control of water resources.

Even the water rich countries (the US, Canada, Russia, and nearly all European and South American countries) are or will one day need to more rigorously manage their water as economic development and population growth creates an increasing demand for water. This will become particularly problematic in the American West which has enjoyed an unusually wet century. Solomon devotes a good deal of attention to the Colorado River basin, which currently is completely exploited. No water from the Colorado reaches the Gulf of California. He also observes that 40% of the huge Ogallala aquifer under the Midwest has been depleted.

Solomon alludes to two important strategies for dealing with these problems. The first is to adopt "soft" approaches to water use, i.e., innovative conservation methods. Isreal and Austrailia are well advanced in generating these methods. Much can be learned from them. The second is to abandon the age old tradition of considering water a basic human right which thereby undervalues it in the market. According to Solomon, allowing market discipline to set prices for water will obviate waste. This later technique has obvious pitfalls. Using the market to price water may have some application in more affluent countries, but globally, without safeguards, it promises greater and greater political strife and human misery.

One method not mentioned by Solomon for employing pricing discipline on water consumption would be to establish a sliding scale for water pricing, where a consumer may purchase a small (necessary) amount of water for little to no cost, with progressive price increases for additional increments of consumption. This method would continue to respect water as a basic human right while discouraging waste.

In all, Solomon's "The Age of Scarcity" is a sobering examination of an unavoidable future. For another admirable treatment of the world's water crises, see When Rivers Run Dry by Fred Pearce reviewed in this blog.

Right Relationship: Building a Whole Earth Economy / Peter G. Brown and Geoffrey Garver -- San Francisco: Berrett-Koehler, 2009

People have faced problems connected to the depletion of natural resources and the disposal of waste in the past, but these problems have been highly localized. Civilizations fell or migrated when their critical resources ran out or their land was too contaminated to be productive, but the planet was large enough to provide new resources elsewhere and heal the destruction caused by our exploitation. It is becoming clear, however, that there are no longer significant untapped resources and that throwing "away" our waste is meaningless given the sheer amount of waste and the limits of the world's ecosystems. In Right Relationship, Brown and Garver address these problems and offer a blueprint for dealing with them.

The first chapters of the book give an admirable explanation of the problems. The most significant observation is something that must become a truism if we are to flourish: the economy is a wholly owned subsidiary of the natural world. From this observation, Brown and Garver conclude that any sustainable economy must acknowledge and operate within the limits of the natural world. Specifically, it must not depend on an unlimited supply of resources and must not assume that the planet is a bottomless sink for industrial waste. Brown and Garver ague that given the present use of resources and how we dispose of waste, we must abandon our current economic assumption that growth is a necessary good. Their argument is undeniable.

Furthermore, Brown and Garver recognize the challenge of resisting the powerful economic forces that drive growth. They offer two strategies to tackle the challenge. The first strategy is modelled on the Quaker movement to end slavery in which individuals bore witness to the injustice of slavery, transforming their daily actions and creating a social climate in which the end of slavery became possible. The second strategy is to create a world government empowered to protect the planet from selfish exploitation. This world government would be responsible for creating resource budgets for nations based upon the environmental impact of the nations' economic needs. The formula describing an economy's ecological impact is a function of population, affluence, technology, and ethics. Each nation would be free to maximize any of these elements only to the extent that the others are reduced enough for the nation to remain within its budgeted impact.

This second strategy is bold to the point of impracticality, but Brown and Garver assert that the ecological dangers we face are so imminent and significant that sketches for a global system need to be formulated and discussed immediately. Their book is an attempt to begin this. Their world government would be composed of four branches: (1) the Global Reserve, responsible for analysing the world's life support budgets, (2) Trusteeships of the Earth's commons, responsible for monitoring and protecting the Earth's major life support systems, e.g., atmosphere, ocean, soil, forests, etc., (3) a Global Federation, responsible for protecting human rights and the global commonwealth using both executive and legislative measures, and (4) a Global Court, responsible for preventing the abuse of the global authorities and enforcing global rules.

Through out their advocacy of a world government, Brown and Garver are sensitive to the criticism that this amounts to a world-wide fascism. In response, they observe that a de facto world government already exist in the form of the World Trade Organization, the IMF, the World Bank, and other international institutions that regulate our actions in pursuit of economic growth, and do so to enhance the well-being of transnational corporate elites. In contrast to this de facto world government, their government would be a more democratic, federated system, operating for the benefit of people and the global commonwealth, and it would establish an economy that remains within the realistic boundaries of the planet's natural extent.

Right Relationship is a valuable contribution to how we might address the coming ecological train wreck. Unfortunately, it is unlikely to convince anyone not already alarmed by corporate, government, and popular negligence. It will, however, be successful if it inspires other work along the same line which might more effectively and practically outline how international institutions could understand and address the challenges to come. Undoubtedly, these challenges will be addressed, but a thoughtful, global, holistic strategy is more likely to be effective than piecemeal actions to correct the most obvious, local disasters.

$20 per Gallon: How the Inevitable Rise in the Price of Gasloline will Change Our Lives for the Better / Christopher Steiner - NY: Grand Central, 2009

Many oil industry analysts have concluded the world has reached its maximum annual production of conventional oil. Henceforth, our energy requirements will need to be increasingly fulfilled by other energy sources: coal, nuclear, renewables, poorer quality oil, tar sands, etc. All of these are inferior sources of energy and are much more expensive to produce. Consequently, the world will see a steady increase in the price of energy which will change our society and our way of life. Christopher Steiner's $20 Per Gallon is an attempt to understand what these chnges will be. Surprisingly, Steiner believes that on balance we will be better off by losing our addiction to cheap oil.

Steiner is a journalist and an undergraduate engineering major. He is not an economist, and this shows in his work. Nonetheless, $20 Per Gallon is a welcome attempt to begin thinking seriously about the consequences of rising oil prices. The work proceeds through ten chapters, titled with a rising price of a gallon of gas (Chapter $4, Chapter $6, Chapter $8, etc.). In these chapters Stiener describes how the incremental increas in gas will wean Americans from SUVs, drastically downsize the airline industry, stimulate the production of electric cars, rebuild our cities and destroy suburbia, restore the character of small towns, rebuild U.S. manufacturing, "deconstruct" our global food system, and stimulate the construction of high speed trains all across America.

While the broad outlines of Steiner's vision of the future are probably correct, he fails to provide the details necessary for a clear picture of the future. The optimistic tone of the work often relies on technological solutions to the problems raised by expensive energy. Hydrocarbon fertilizers will be replaced with electrolosis created amonia, the burden that electric cars will place on our electric grid will be solved by smart grid technologies, and petro-plastics will be replaced by bio-plastics. Between the lack of detailed economic analyses and the faith in technological solutions, the hopeful picture of the futre seems more hopeful than justified.

Perhaps the strongest chapters in the book outline the development of urban neighborhoods, public transportation, and high speed interstate rail lines. These developments rely mainly on proven technologies and a will to implemented cost effective plans. It is very easy to see how the rise in energy prices will stimulate retrofitting our housing and building stock to avoid heating and cooling waste and how our transportation needs will require the development of cost effective ways of moving our workforce to and from their houses and workplaces.

It is less clear that we will be able to feed our huge population without the cheap energy that made such a population possible. Steiner would have done better to investigate the carrying capacity of land in and around our major cities to see just what land and water resources would be needed to feed them and how much it would cost to bring enough food to the market. If our current conurbations are not viable, our future will be different in ways that Steiner does not explore.

Nonetheless, one is left with less anxiety about the future having read $20 Per Gallon. For anyone contemplating the most dire scenarios spun out by "peak oil" theorists, that may be a good thing. One should not underestimate the resourcefulness of people and our ability to create meaningful and enjoyable lives without the goods and services of our hydrocarbon economy. Still, Steiner's vision is certainly too rosy. He consistently glosses over the real sacrifices that people will need to make with the loss of cheap energy or during the transition to a new energy economy.

Many of these sacrifices are likely unanticipate today, but it precisely because they are unanticipated that Steiner's book is so valuable. It is the first attempt I have seen to seriously imagine the consequences of rising energy prices. If only a good economist would bring her or his attention to the issue as Steiner has.