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Global Warming, GMOs and economics: the big picture 12 January, 2004
A story of “grand narratives”, models and smoking guns

[A note: this bit of work arises partly because I have just reviewed Brude Caldwell's "Hayek's Challenge: an intellectual biography of F A Hayek" (Chicago, 2004). It reminds one how vigorously intelligent economic debate has been compared with its ecological counterpart. But also how inconclusive such debate can be, however intelligent.]

One way of discussing the two highest profile environmental issues is to compare the way we discuss them with the way we talk about economics. After all, they similarly involve arguments about how we understand “complex systems” – and if, when and how we should try to manage them. The technique has this advantage: we have spoken about economics for centuries. Our successes and failures there may help us in the new anxieties.

This approach suggests we ask of the environmental issues the kind of thing we ask of economics: Do we know much about these systems? In particular: do they yield evidence to us? With the available evidence, can we model these systems adequately? In the degree to which a model reflects reality well, do its results constitute evidence? Are models good at prediction? If they are not, how do we make policy?

There is one profound difference between economics and atmospheric science and ecology. In the one case, we are trying to stimulate human activity (admittedly of a particular sort) and in the latter it often looks as though we ought to stifle human activity – and across quite a broad spectrum. This matters a lot.

But even here, we can see a similarity in the various responses people have to calls for restraint. In life – and we have seen this for centuries in the way economics is discussed - there are Puritans and Cavaliers, Conservatives and Progressives, left and right. And though there are many counter-currents and complications, the easiest way of seeing the difference between them is to divide people into those who want there to be lots of policy in the world, and those who want as little as possible.

This is not a matter of what they expect, or accept, or can understand, but what they prefer – where their heart lies. I, for instance, accept that policy is vital and interesting (and the highest profession, possibly), but I want there to be very little of it. I think a happy society is one which there is little need for policy. On the other hand, I note that there are many people who seem very happy to try to persuade their fellows of the merit of myriad policies, and tend to admire societies with lots of rules.

One of the similarities between environmental and economic issues is that they are bedevilled by similar Roundhead/Cavalier splits. They have both seen campaigns waged on broadly similar grounds, between “left” and “right” – with the “right” being broadly laissez-faire and the left being interventionist. These polar-opposites are widely supposed to hugely influence the evidence which their proponents accept, and the factual conclusions they come to as to the nature of the world (the economy, the environment) they are discussing. (We will see that the left-right polarity is a caricature, and anyway breaks down in interesting ways.)

And similarly between all our subjects, people often base their conclusions as to policy on “merely” normative grounds – that is, derived from prejudice or conviction) as opposed to being based on facts (derived from evidence). Indeed, since a fact never has an opinion – what would it mean to say one based a decision on a fact? One often hears it said that recycling is a good in itself, even if it can be proved that in this or that case it is less ecologically sound. This is very similar to the suggestion that highly progressive taxation is a good in itself even if it is not optimal as a revenue-raiser. (Recycling, it is argued, enshrines good thrifty principles, just as progressive taxation is a moral stance against inequality.)

Finally, the comparison between our “campaign” issues and economics is valuable, if real, because we have much more experience with trying to derive policy from economics than we have with the environment. We might want to be modest – or bold – in formulating environmental policy, and might want to shape it in particular ways, according to our view of how economic policy had worked out.

Environment issues
We are dealing with complex systems: the world’s atmosphere, the world’s biosphere. To what extent are we dealing with “cool” facts (positive issues), and to what extent with opinions (“normative” positions)?

Global Warming
We have no evidence about global warming. At least we have no verifiable, falsifiable facts about it. We have no “smoking gun” which links a thickening greenhouse to our current rather warm decades. But we have some decent assumptions that we are likely to be warming the planet. We have circumstantial evidence rather than cause-and-effect evidence. But given that we are almost certainly changing something which is fundamental, we are bound to think about it. Besides, we lock up most criminals on circumstantial evidence: it’s the basis for a lot of other actions.

The study of global warming is of course a science (it seeks hypotheses and theories to fit such facts as we have about some aspect of the natural world). But it is not a science in this sense: it has no experiments. Indeed, as Mrs Thatcher said, the whole of anthropogenic global warming is one huge experiment. This means that it has no precedents, so no track record is available for its study. What is more, there are no elegant little subsets of it which we can pick up and study in isolation.

Economists face some of these problems, but with fewer disadvantages. They can make experiments, of a kind, but they are so unreal that they don’t prove much. They gather data, but it doesn’t get them very far. Economists have centuries of real-world material to work with, but still argue about every element, large and small. They ask: is economic man a reality; rational; selfish? And then they argue all the way up the scale to the global economy. They seldom agree a description or a proscription – and their agreements are often within clubs convened on ideological grounds, not evidence.

Broadly speaking, GW science is very like much economics study: it depends on models. We make equations of as many of relationships as we think we understand, and run them through a computer. We do this though we know that in economics the ability of models to replicate or predict real-world circumstances is slight (and is improved often by fiddling with the inputs until the reality-match happens). In the GW case, we apply our supposed outcomes to systems which we similarly model, such as biodiversity. We may be heaping fallibility on fallibility as we attain what may well be a spruious precision in our predictions.

As we move on to respond to any supposed global warming, our understanding of economic policy should also make us sceptical. We know that unintended consequences plague economic policy. Besides, we know that marginal influences exerted by policy are very hard to detect against the “noise” in the system. And then we might reflect on the fact that one of the difficulties in policy-making for large economic systems is that they are non-linear (perhaps that’s what defines complexity anyway). The atmosphere is a non-linear system as well.

We do know something about economic success: we have many success stories to base our ideas on. But the stories are very various, and mostly confound the ideological certainties of left and right. (Wealth creation depends on markets and entrepreneurs, whose activities depend on very non-entrepreneurial institutions. Policy is crucial to markets, but can kill them.)

But whilst there may be similarities between the study of economic and environmental systems, surely there are big difference too.

A distinction between economic and environmental policy: if you want to create wealth you need to set greedy people free (within limits, and within some policy frameworks). But environment policy wholly depends on restraint being imposed, surely?

Well no. There are the obvious thoughts that the cheapest way to get an environmental solution is often to set entrepreneurs to deliver it and anyway, many environmental problems are caused by poverty or can be relieved only by the rich.

There is more to it than that. In democracies one can’t impose restraint at all: there has to be a demand for it. Here there is a similarity between economics and environment. Leave aside whether we had too much welfare in the second half of the 20th century, we had welfare as a function of affluence being combined with democratic demand. And so will be the eventual acceptance of whatever policy is deemed necessary to address, say, global warming. Affluence will not be crucial to satisfying any demand for measures to address global warming – but it may make it far easier to get the willingness to deal with the problem. (The cost of addressing global warming may be better borne by the rich – though they may be the most reluctant to curtail their pleasurable excess. It works both ways.)

The essence of this similarity is this: in much economic and environmental policy, policy will be imposing limits on human greed. In neither can you act until the political climate allows; in both you are seeking regulation which will go as well as possible with one of the facts of politics – that people’s greed must not be ignored.

The global warming debate is conducted by parties with considerable bias.
The global warming “consensus” is fuelled by government money which seeks agreement that there is a problem (if there were no problem, there would be no funding, and a consensus is insisted-upon because the funders seek policy). It is supported by NGOs because it fits their view that man’s greed is damaging his planet.
The “contrarians” are a ragbag of more differentiated types. Some (the neo-Marxist RCP/LM/Spiked/IoI/SoS group) perhaps seek an energetic and “progressive” unfolding of the capitalist world of technology, opportunity and affluence. (We don’t know, because they don’t say.) They certainly hate the “precautionary”, repressive urges of greens and others. Some contrarians (Matt Ridley, perhaps RDN, perhaps Lomborg, perhaps Stott) have an intellectual distrust of green orthodoxies, and perhaps orthodoxies in general. Others (many American corporates) – and possibly politicians, too - take elements of these tendencies, but are highly-motivated (perhaps temporarily) to maintain “business-as-usual”.

Note that the NGO supporters of the consensus and the contrarians ought both to be embarrassed by their positions: global warming reverses the normal preference of each side. The former normally distrust “reductive” science, and the latter normally support it. The NGOs get out of this by ignoring their embarrassment and the contrarians insist that is they who are deploying scientific method, by challenging both bad science and orthodoxy (challenging the latter is the core of scientific activity).

The public probably quite believes that global warming is big, bad and man-made. In spite of that, it enjoys the uncertainty (which makes action unnecessary) and hopes there are no-pain solutions. It badly wants cheap energy and unlimited freedom to burn it thoughtlessly. That sloppiness of thought could change, if the evidence became clear. Besides the Post-Modern may deliver less interest in mobility – which would solve many global warming problems, and a few others besides.

The economic parallel is strong if we think of the way that left and right think about economic matters, and make them thoroughly partisan. That is, after all, the basis of a large amount of academic discussion and a huge amount of political activity. But there is this difference: in economic matters there is some sort of divide (not total, and not fixed) between the rich and the poor. More or less, and with exceptions, the poor favour intervention (especially redistributive taxes) and the better-off don’t. Of course, many middle income people, and some rich people, are strongly redistributive, but overall it is easier to canvass for low taxes in rich neighbourhoods than poor ones, and vice versa.

A left-right division exists in environmental matters, but it is not income-determined. Nor does it correlate with education terribly well. More, we see amongst the small minority of the population which interests itself in environmental matters a divide between those that are interventionist (a large majority) and those that are not (a small minority). Much (not all) environment policy happens because a relatively small but powerful group exert pressure on the body politic. In economic matters, it is a large group of people who are not individually powerful which achieves policy intervention. (It is easy to think up challenges to this contention, but such challenges have to meet the objection that tax policy is a populist issue, in both directions, whilst environment never has been.)

GM policy
Here the debate is much simpler, but also darker. (We can come to the economic dimensions later.) It concerns health (which we can dismiss as uninteresting for now) and ecology.

Ecology and GM
Ecological opinion is divided as to the various problems (out—crossing, pesticide resistance especially). But most informed (as opposed to passionate) opinion suggests that the parallels between, on the one hand, biotechnological modification (GM) and, on the other, “conventional” genetic manipulation, are so close that we can guard against the worst effects of one as we have against the other. (Unavoidable or careless alien species introductions help make this case).

Besides, this is a series of piecemeal experiments (some with potentially irreversible outcomes to be sure), whose actors are relatively few (groups of farmers) and whose field of damage is likely to be small if any (regions, countries, etc). (This is in sharp distinction to the global warming effects, which are planetary and caused by every human.) What is more, most informed opinion stresses that GMOs are good or bad, not in themselves, but according to the various agricultural regimes (pesticide-use, etc) that millions of farmers will use alongside them. Even those scientists who fear GM, tend to fear its implementation, not its principle.

So with GM, we have experiments, smoking guns, cause-and-effect effects. Compared with global warming, we are doing less extrapolating, less reasoning from small evidence.

Still, many of the wings of this argument are similar to those in the GW case. The greens argue precaution, and are opposed by the neo-Marxists. But there are profound differences in the arguments of nearly all other players.

The corporate case for GM relies on its human welfare benefits rather as those in the pharmaceutical industry do. Food production is a little like health provision: the sense of human need, and the risk assessments, are similar. (Though, contrariwise, GM is accepted without demur in its health product applications – it is only controversial as a crop or as food.) By contrast, the oil and automobile industries have been more likely to stress the needs of economic growth when they defended unfettered use of fuel.

Scientists involved in GM behave very differently to those involved in GW. The scientific establishment, for example (the Royal Society especially), are seized of the irritating thought that almost all the anti-GMO arguments (those that are against it irrespective of particular applications) are un- or anti-scientific. But they strongly stress that it is in the management of the technology’s use that the issues really lie. Indeed, it sometimes seems to bend over backwards to accommodate the uncertainties involved (presumably so as not seem to have been co-opted by the corporate interests that promote GM, and so as to give no hostages in its battle against the unscientificity of the green anti-GM crusade). The RS, for instance, seems less excited by the evidential weaknesses of the GW case, and it is not the handling of that issue that has given rise to its anxiety about “the public understanding of science”.

Further differences between GM and GW

There is a no grand theory of GM as there is a grand theory of GW. This is because there is no one complex system within which GM works or which it risks damaging. That’s part of the reason why the case for or against GM doesn’t depend on one’s belief in modelling in general or any particular model. (So the GM debate is less like the economics debate than is GW.)

The GM debate does have one very large ideological component. This is the “unnaturalness” of “playing God” which moves some anti-GM people, and perhaps most moves those who cheer them on from the sidelines.

What’s more, the GM debate has this further ideological component. It is seen as a technology driven by large seed firms and large farmers, and is therefore quite prone to the left-right tensions exploited by anti-capitalists and anti-globalisers, in a way which GW isn’t.

Similarities between GM and GW: the power of agendas

The Post Modern geographer Philip Stott uses the idea of competing “grand narratives” to explain how environmental arguments work, and he’s right to (and the technique has the merit of reminding us of economic similarities). Broadly - according to Stott and others - there are those who favour human adventure (and are “progressives”) and those who favour a “respect for nature” (and are “green”). (A subset of the former view stresses that “nature” includes human adventurousness.)

Oddly, this Grand Narrative divides people who are allies on other matters. This is because they are conventionally “green” in their wariness of messing with nature. Thus, they dislike GM’s enemies (for being anti-scientific) but would be quite cautious in allowing GM use. In short, they are conflicted.

Contrariwise, one suspects that most scientist members of the GW consensus have no difficulty promoting it, and are largely irritated by those contrarians who challenge any part of the consensus view. Few of them are conflicted on the issue.

The green Grand Narrative is accepted by many scientists, along with left-of-centre politics. This is not surprising: they are often public–sector workers, seldom operate as entrepreneurs, and are part of a wider academic culture which is broadly “dissident”. Besides, to be green is even more common than to be left-of-centre: it is the default position of the majority in society (except – and it’s an important caveat – on matters affecting their wallet or convenience).

This means that scientist often worry about GM whilst there’s very little scientific evidence that they should. But scientists contrariwise are very happy to worry about GW even in the absence of much evidence that they should (or that they can do much about it).

It is often said that on ecological matters, the green Grand Narrative has close parallels with religious feeling. That is true. Greenness is also – on rather similar lines - a surrogate for virtue. But it has this convenience to its adherents: it often proposes a virtue which seems free to those that aspire to it. That’s to say: it seems to them (probably falsely) that it is cheaper and easier to espouse green virtue than it is to espouse economic virtue – which requires a more obvious and greater generosity. (It is moot whether middle-class socialists are being generous when they accept high taxes for themselves: “churn” and other effects make them believe high-taxes are good for them.)

Progressive or green prejudices, and their effect on policy

If you are a progressive – whether a scientist or not - you hope that it turns out that the risks of GM and GW have been overstated. You want not to have to do anything to halt either. (But not necessarily to the point where you would rather ignore the risks if they are there.)

If you are a green, you don’t mind if the risks turn out to have been overstated. That way, preventative action will be spurred. (That’s not to say that a green hopes the risks are large: most greens don’t hope for disaster, only for action. However, greens are in the position that bad news is good - the journalist’s problem.)

As one considers the evidence about GM, one notices that it can be real (observable), and it can arrive piecemeal (in real, often quite limited areas). These factors make a precautionary stance less urgently necessary (because one most needs precautionary prevention when the evidence is slight and the risk high).

As one considers the evidence of GW, one notes that the precautionary principle is well-applied, because the evidence is slight and risks huge (which is a prima facie case for preventative action).

However, any policy response – even a precautionary one – must also be judged on its likely efficacy. We are indeed very likely to be able to halt the risk posed by GM (at least in the UK, say, where we could ban GMOs), but we cannot be spared the risk posed by GW (it will persist at least for decades in the face of all plausible action to stem the emissions which cause it). We might in time address GW quite easily, and even be willing to do so. For the time being, only trivial avoidance or adaptive strategies are likely.

(This leaves aside altogether whether a ban on GMOs could survive precautionary analysis of the dangers posed by not proceeding with the technology, and the case for GM in farming worldwide.)

In the UK, it is argued that the benefits of GM are slight, so green people (even those who are science-led) feel very little emotional attachment to progressing the GM cause. And it is argued that the costs of addressing GW might be very high, so even green people (including those who are science-led, if they are honest, and consider the “pain” that might fall to them) are reluctant to do very much about it.

Global politics and GM and GW
It is quite possible that – in spite of the scientific consensus - the world’s countries will fail to address GW in a way which avoids further warming – so we will be “condemned” to adjusting to whatever unfolds.

It is likely that the world’s countries will mostly grab at GM, and that – if the view of the majority of scientists is right, and sufficient care is taken - there will be some benefit and scant harm.

RDN’s position on GW and GM.
I am ordinarily “green” but with strong “progressive” tendencies. I am in love with science. I don’t like interfering with people’s freedoms if it can be avoided. That makes me a very conflicted type. I am not in “denial” because I constantly stress the foregoing.

I am conflicted about GW because I am not sure how scientific “the scientists” in the consensus really are. I don’t trust our historic ability to understand or model complex systems (pace, the economics case) yet I am drawn to the idea that we might be able to. I think humans must take risks, and won’t bear much “pain” to solve future or distant problems. I think the rich of the world could quite soon and without much pain live our present lives without many emissions of greenhouse cases (and this will eventually – probably not soon – be true of all humans). I do not believe our present views on lifestyle are at all fixed: we may change our demand for space and movement – either because we must give them up (as a result of GW policy) or because of technological and cultural changes.

Indeed, it is very arguable that to be “progressive” takes us toward addressing GW. Greenhouse gases arise from old-fashioned energy sources: to be modern will be to get beyond the need for them.

All the same, I hear too little discussion of how to tackle greenhouse emissions equitably or efficiently – let alone on the scale apparently required. I am not inclined to trust that we will choose wise policy granted the poverty of the discussion. (Lomborg’s discussion of GW and the policy response to it was only novel in being strongly “consensual” on the matter of GW and mildly “contrarian” on the matter of dealing with it – and he was excoriated for it. His positions were entirely derivative, and yet he was criticised as though he was developing new heresies.)

If I was a policy-maker, I would weakly muddle along roughly according to what was electorally possible, as the US and EU leaders do, whilst generating intellectually plausible rationales for my action (or inaction), as they are doing. I would be energetically promoting the discovery of least-cost regulatory devices designed to swing the market into addressing greenhouse emissions – as the western world is more or less doing now. I hope I would aim to be a little more vigorous on the topic than most leaders are, and thus risk losing popular support.

As a commentator, all I can do is try to improve the quality of debate.

I am convinced that GM technology is likely to be agriculturally and ecologically useful, and will prove itself so without harm. However, the choice to grow or eat GM crops does rightly lie under democratic control, and if GMs are unpopular in the UK, I can’t see that it matters very much that they are not grown or consumed here. Indeed, there is a case for arguing that it is properly the business of the British electorate and no one else what we grow or eat here, however unscientific, “green”, or even “religious” that impulse is.

It will not be particularly noble, but it will probably emerge that GM becomes uncontroversial in use all over the world, and that Britons will profit from the technology (whilst not allowing its use near them) and eventually turn to its use at home. If that transpires, one hopes they will be embarrassed by their folly in eschewing the technology for so long, and their readiness to own shares in firms which pioneer the technology whilst themselves voting not to use it.

The GM case will remain an important litmus test for the willingness of Britons to enrich their view of nature sufficiently for it to allow technological progress.


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