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Crisis Capitalism

The scroll of cognitive biases identified by behavioral psychologists and fellow travelers over the last half century is, like a social media feed, apparently infinite, and every single one distorts and distends our perception of a changing climate—a threat as imminent and immediate as the approach of a predator, but viewed always through a bell jar.

There is, to start with, anchoring, which explains how we build mental models around as few as one or two initial examples, no matter how unrepresentative—in the case of global warming, the world we know today, which is reassuringly temperate. There is also the ambiguity effect, which suggests that most people are so uncomfortable contemplating uncertainty, they will accept lesser outcomes in a bargain to avoid dealing with it. In theory, with climate, uncertainty should be an argument for action—much of the ambiguity arises from the range of possible human inputs, a quite concrete prompt we choose to process instead as a riddle, which discourages us.

There is anthropocentric thinking, by which we build our view of the universe outward from our own experience, a reflexive tendency that some especially ruthless environmentalists have derided as “human supremacy” and that surely shapes our ability to apprehend genuinely existential threats to the species—a shortcoming many climate scientists have mocked: “The planet will survive,” they say; “it’s the humans that may not.” There is automation bias, which describes a preference for algorithmic and other kinds of nonhuman decision making, and also applies to our generations-long deference to market forces as something like an infallible, or at least an unbeatable, overseer. In the case of climate, this has meant trusting that economic systems unencumbered by regulation or restriction would solve the problem of global warming as naturally, as surely as they had solved the problems of pollution, inequality, justice, and conflict.

These biases are drawn only from the A volume of the literature—and are just a sampling of that volume. Among the most destructive effects that appear later in the behavioral economics library are these: the bystander effect, or our tendency to wait for others to act rather than acting ourselves; confirmation bias, by which we seek evidence for what we already understand to be true, such as the promise that human life will endure, rather than endure the cognitive pain of reconceptualizing our world; the default effect, or tendency to choose the present option over alternatives, which is related to the status quo bias, or preference for things as they are, however bad that is, and to the endowment effect, or instinct to demand more to give up something we have than we actually value it (or had paid to acquire or establish it). We have an illusion of control, the behavioral economists tell us, and also suffer from overconfidence and an optimism bias. We also have a pessimism bias, not that it compensates—instead it pushes us to see challenges as predetermined defeats and to hear alarm, perhaps especially on climate, as cries of fatalism. The opposite of a cognitive bias, in other words, is not clear thinking but another cognitive bias. We can’t see anything but through cataracts of self-deception.

Many of these insights may feel as intuitive and familiar as folk wisdom, which in some cases they are, dressed up in academic language. Behavioral economics is unusual as a contrarian intellectual movement in that it overturns beliefs—namely, in the perfectly rational human actor—that perhaps only its proponents ever truly believed, and maybe even only as economics undergraduates. But altogether the field is not merely a revision to existing economics. It is a thoroughgoing contradiction of the central proposition of its parent discipline, indeed to the whole rationalist self-image of the modern West as it emerged out of the universities of—in what can only be coincidence—the early industrial period. That is, a map of human reason as an awkward kluge, blindly self-regarding and self-defeating, curiously effective at some things and maddeningly incompetent when it comes to others; compromised and misguided and tattered. How did we ever put a man on the moon?

That climate change demands expertise, and faith in it, at precisely the moment when public confidence in expertise is collapsing, is another of its historical ironies. That climate change touches each of these biases is not a curiosity, or a coincidence, or an anomaly. It is a mark of just how big it is, and how much about human life it touches—which is to say, nearly everything.

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You might begin the B volume with bigness—that the scope of the climate threat is so large, and its menace so intense, we reflexively avert our eyes, as we would with the sun.

Bigness as an excuse for complacency will be familiar to anyone who has listened in on an undergraduate debate about capitalism. The size of the problem, its all-encompassing quality, the apparent lack of readymade alternatives, and the enticement of fugitive benefits—these were the building blocks of a decades-long subliminal argument, directed at the increasingly disgruntled professional middle classes of the wealthy West, who on another planet might have formed the intellectual vanguard of a movement against endless financialization and unencumbered markets. “It is easier to imagine the end of the world than to imagine the end of capitalism,” the literary critic Fredric Jameson has written, attributing the phrase, coyly, to “someone” who “once said it.” That someone might say, today, “Why choose?” When it comes to authority and responsibility, scale and perspective often befuddle us—we may be unable to recognize which matryoshka doll nests inside the other, or on whose display shelf the whole set sits. Big things make us feel small, and rather powerless, even if we are nominally “in charge.” In the modern age, at least, there is also the related tendency to view large human systems, like the internet or industrial economy, as more unassailable, even more un-intervenable, than natural systems, like climate, that literally enclose us. This is how renovating capitalism so that it doesn’t reward fossil fuel extraction can seem unlikelier than suspending sulfur in the air to dye the sky red and cool the planet off by a degree or two. To some, even ending trillions in fossil fuel subsidies sounds harder to pull off than deploying technologies to suck carbon out of the air everywhere on Earth.

This is a kind of Frankenstein problem, and relates to widespread fears of artificial intelligence: we are more intimidated by the monsters we create than those we inherit. Sitting at computers in air-conditioned rooms reading dispatches in the science section of the newspaper, we feel illogically in control of natural ecosystems; we expect we should be able to protect the dwindling population of an endangered species, and preserve their habitat, should we choose to, and that we should be able to manage an abundant water supply, rather than see it wasted on the way to human mouths—again, should we choose to. We feel less that way about the internet, which seems beyond our control though we designed and built it, and quite recently; still less about global warming, which we extend each day, each minute, by our actions. And the perceptual size of market capitalism has been a kind of obstacle to its critics for at least a generation, when it came to seem even to those attuned to its failings to be perhaps too big to fail.

It does not quite seem that way now, standing in the long shadow of the financial crisis and watching global warming beginning to darken the horizon. And yet, perhaps in part because we see the way that perspectives on climate change map neatly onto existing and familiar perspectives on capitalism—from burn-it-all-down leftists to naively optimistic and blinkered technocrats to rent-seeking, kleptocratic, growth-is-the-only-value conservatives—we tend to think of climate as somehow being contained within, or governed by, capitalism. In fact, the opposite: capitalism is endangered by climate.

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That Western capitalism may owe its dominance to the power of fossil fuels is not anything like consensus economic wisdom, but it also isn’t just a pet theory of the socialist Left. It was the core claim of Kenneth Pomeranz’s The Great Divergence, probably the single most conventionally esteemed account of just how it was that Europe, long effectively a provincial backwater to the empires of China, India, and the Middle East, separated itself so dramatically from the rest of the world in the nineteenth century. To the big question of “Why Europe?” The Great Divergence offers something almost as simple as a one-word answer: coal.

As an account of industrial history, the reductionist story implied by “fossil capitalism”—that what we conceive as the modern economy is really a system powered by fossil fuels—is in ways persuasive but also incomplete; of course there is more to the network that gives us a whole yogurt aisle in the supermarket than the simple burning of oil. (Though maybe less “more” than you’d think.) But as a picture of just how deeply entangled the two forces remain, and how the fate of each defines the fate of the other, the term promises to be a very useful shorthand. And raises the question, now merely rhetorical on parts of the Left: Can capitalism survive climate change?

The question is a prism, spitting out different answers to different ranges of the political spectrum, and where you fall on that range probably reflects what you mean by “capitalism.” Global warming could cultivate emergent forms of eco-socialism on one end of the spectrum, and could also conceivably produce a collapse of faith in anything but the market, on the other. Trade will surely endure, perhaps even thrive, as indeed it did before capitalism—individuals making trades and exchanges outside a single totalizing system to organize the activity. Rent-seeking, too, will continue, with those who can scrambling to accumulate whatever advantages they can buy—the incentive only increasing in a world more barren of resources, and more mournful of recent apparent abundance, now disappeared.

This last is more or less the model that Naomi Klein memorably sketched out in The Shock Doctrine, in which she documents just how monolithically the forces of capital respond to crises of any kind—by demanding more space, power, and autonomy for capital. The book is not primarily about the response of financial interests to climate disasters—it focuses more on political collapse and crises of the technocrats’ own making. But it does give a very clear account of what kind of strategy to expect from the world’s money elite in a time of rolling ecological crisis. More recently, Klein has offered the island of Puerto Rico, still reeling from Hurricane Maria, as a case study, even beyond its unfortunate spot in the path of climate-change-fueled hurricanes. Here is an island endowed with abundant green energy nevertheless importing all its oil, and an agricultural paradise nevertheless importing all its food, importing both from a quasi-colonial mainland power that sees it merely as a market. That mainland power has effectively turned over the government of the island, down to its power company, to a select board of bondholders whose interest is in the repayment of debt.

It is hard to imagine a better illustration of the empire of capital in a time of climate change. And it is not merely rhetorical. In 2017, just after the storm, Solomon Hsiang and Trevor Houser calculated that, all on its own, Maria could cut Puerto Rican incomes by 21 percent over the next fifteen years, and that the economy of the island could take twenty-six years to return even to the level it enjoyed just before the storm—a level, Klein reminds us, already strained. This did not prompt a dramatic expansion of social spending or the extension of a Marshall Plan across the Caribbean; instead, Donald Trump tossed a few rolls of paper towels to the citizens of San Juan, then left them to plead with the outsiders who now controlled the public coffers for mercy, which did not come. The echo of financial crisis is unmistakable, as Hsiang and Houser note, suggesting such crises may offer the best conceptual model for the punishments of climate change. “For Puerto Rico,” they write, “Maria could be as economically costly as the 1997 Asian financial crisis was to Indonesia and Thailand and more than twice as damaging as the 1994 Peso Crisis was to Mexico.” —

How well will the shock doctrine be sustained through a new climatic regime, one that assaults the economies of the world with extreme weather and natural disaster at an entirely unprecedented rate and—just in the diminishing downtime between hurricanes and floods and heat waves and droughts—also threatens to devastate agricultural yields and cripple worker productivity? It is an open question, as are all those having to do with human response to global warming in the present and future. But here, too, even relatively fractional adjustments to the West’s basic orientation toward business and financial capitalism are likely to arrive like earthquakes, so much has that orientation produced the culture’s collective sense of what is thinkable and what is not.

One possibility is that the scramble for shrinking profits by the powerful will only intensify, a further self-entrenchment of the rule of capital; this is the outcome you might extrapolate from a consideration of the last several decades. But over those decades, capitalists could still count as a public-relations ally the promise of rising-tide growth. In fact, despite our many and divergent varieties of markets, that promise has served as something like the basic ideological infrastructure of the world since at least 1989—and it is no coincidence that carbon emissions have exploded since the end of the Cold War.

Climate change will accelerate two trends already undermining that promise of growth: first, by producing a global economic stagnation that will play, in some areas, like a breathtaking and permanent recession; and second, by punishing the poor much more dramatically than the rich, both globally and within particular polities, showcasing an increasingly stark income inequality, unconscionable already to more and more. In an economic future doubly mangled by those forces, the near-monopoly on social power presently enjoyed by the world’s very wealthy will likely have much more to answer for, to say the least.

And how might it answer? Beyond new Social Darwinist appeals to unequal outcomes as “fair” ones, an already familiar one-percenter worldview, the force of capital may find itself with very little to say. The market has justified inequality for generations by pointing to opportunity and invoking the mantra of new prosperity, which it promised would benefit all. This was probably always less credible as a truth claim than it was as propaganda, and, as the Great Recession and the deeply unequal recovery that followed showed unmistakably, income gains in the world’s advanced capitalistic countries have gone, for several decades now, almost entirely to the very wealthiest. That this itself represents a crisis of the entire system is clear not just from the raging populism, on both left and right, sweeping Europe and the United States in the aftermath of the crash, but by skepticism and lacerating self-doubt beaming out from the highest free-market citadels. In 2016, the IMF published an article titled “Neoliberalism: Oversold?”—the IMF. And Paul Romer, later the chief economist of the World Bank, proposed that macroeconomics, the “science” of capitalism, was something like a fantasy field, equivalent to string theory, that no longer had any legitimate claim to describing the workings of the real economy accurately. In 2018, Romer won the Nobel Prize. He shared it with William Nordhaus, who pioneered the study of the economic impact of climate change. An economist, Nordhaus favors a carbon tax, but a low one—his “optimal” carbon price still allows for 3.5 degrees Celsius of warming.

At present, the economic impacts of climate change are relatively light: in the United States, in 2017, the estimated cost was $306 billion. The heavier impacts await us. And if, in the past, the promise of growth has been the justification for inequality, injustice, and exploitation, it will have many more wounds to salve in the near climate future: disaster, drought, famine, war, global refugeeism and the political disarray it unleashes. And, as a salve, climate change promises almost no global growth; in much of the world hit hardest, in fact, negative growth.

To the extent that we tend to believe today in human resiliency against such disasters, it is a legacy of several hundred years of industrial affluence produced by our exploitation of fossil fuels. Medieval kings did not believe they could grow their way out of plague, or famine, and those who lived in the shadow of Krakatoa or Vesuvius did not blithely assume they could endure volcanic eruption. But the downward revision of expectations for the future may be still more important than diminished prosperity in the present. And if what you mean by “capitalism” is not just the operation of market forces but the religion of free trade as a just and even perfect social system, you have to expect, at the very least, that a major reformation is coming. The predictions of economic hardship, remember, are enormous—$551 trillion in damages at just 3.7 degrees of warming, 23 percent of potential global income lost, under business-as-usual conditions, by 2100. That is an impact much more severe than the Great Depression; it would be ten times as deep as the more recent Great Recession, which still so rattles us. And it would not be temporary. It is hard to imagine any system surviving that kind of decline intact, no matter how “big.” —

If capitalism does endure, who will pay?

Already, in the United States, courts are awash in a wave of lawsuits aimed at extracting climate damages—a bold gambit, given that most of the impacts they enumerate have yet to arrive. The most high-profile are the torts brought against oil companies by crusading attorneys general—public health claims, more or less, put forward by the public or at least in its name, against companies known to have engaged in disinformation and political-influence campaigns. This is the first vector of climate liability: against the corporations that have profited.

Another kind of charge is made in Juliana v. the United States, also known as “Kids vs. Climate,” an ingenious equal-protection lawsuit alleging that in failing to take action against global warming, the federal government effectively shifted many decades’ worth of environmental costs onto today’s young—an inspiring claim, in its way, made by a group of minors on behalf of their entire generation and those that will follow, against the governments their parents and grandparents voted into office. This is the second vector of climate liability: against the generations that have profited.

But there is also a third vector, yet to be litigated in any more formal setting than the conference rooms in which the Paris accords were negotiated: against the nations that have profited from burning fossil fuels, in some cases to the tune of whole empires. This is an especially electric vector because it is the descendants of the subjects of those empires who will bear the bluntest climate trauma—which is what has already inspired the political outrage organized under the banner of “climate justice.” How will those claims play out? A range of scenarios is possible, having to do mostly with what human choices and commitments are made over the next decades. Exploitative empires have collapsed before into relatively peaceful rapprochements, retributive energies muffled by the cushions of reparations, repatriation, truth, and reconciliation. And that could emerge as the dominant approach to climate suffering—a cooperative support network erected in the spirit of mea culpa. But there has been little acknowledgment yet that the wealthy nations of the West owe any climate debt to the poor nations who will suffer most from warming. And that suffering, and the exploitation it expresses, may also prove too gruesome a prompt for high-minded cooperation between nations, many of which could instead look away or retreat into denial.

We do not yet know, of course, just how much suffering global warming will inflict, but the scale of devastation could make that debt enormous, by any measure—larger, conceivably, than any historical debt owed one country or one people by another, almost none of which are ever properly repaid.

If that seems like excessive hyperbole, consider that the British Empire was conjured out of the smoke of fossil fuels and that, today, thanks to that smoke, the marshland of Bangladesh is poised to drown and the cities of India to cook within just the span of a single lifetime. In the twentieth century, the United States did not establish such explicit political dominion, but the global empire it presided over nevertheless transformed many of the nations of the Middle East into oil-pipeline client states—nations now scorched every summer by heat approaching uninhabitable levels in places, and where temperatures are expected to become so hot in the region’s holiest mecca that pilgrimages, once the annual rite of millions of Muslims, will be as lethal as genocide. It would take an exceedingly idealistic worldview to believe that the matter of responsibility for that suffering will not fashion our geopolitics in a time of climate crisis, and the cascading flow of that crisis, should we not dam it first, does not offer much foothold for idealism.

Of course, present political arrangements, not to mention bankruptcy law, will conspire to limit climate liability—for oil companies, for governments, for nations. These arrangements may buckle and fall—under force of political pressure and even insurrection—which would have the perhaps unintended effect of clearing from the stage all of the most obvious villains and their guardians, leaving no easy marks to which we might apportion blame and expect commensurate payback. At that point, the matter of blame could become an especially potent and indiscriminate political munition—residual climate rage.

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If we do succeed, and pull up short of two or even three degrees, the bigger bill will come due not in the name of liability but in the form of adaptation and mitigation—that is, the cost of building and then administering whatever systems we improvise to undo the damage a century of imperious industrial capitalism has wrought across the only planet on which we all can live.

The cost is large: a decarbonized economy, a perfectly renewable energy system, a reimagined system of agriculture, and perhaps even a meatless planet. In 2018, the IPCC compared the necessary transformation to the mobilization of World War II, but global. It took New York City forty-five years to build three new stops on a single subway line; the threat of catastrophic climate change means we need to entirely rebuild the world’s infrastructure in considerably less time.

This is one reason a single-shot cure-all offers an undeniable appeal—which brings us back to that magic phrase, “negative emissions.” Neither negative-emissions method—“natural” approaches involving revitalized forests and new agricultural practices, technological ones that would deploy machines to remove carbon from the atmosphere—requires wholesale transformation of the global economy as it is presently constituted. Which is perhaps why negative emissions, once a last-ditch, if-all-else-fails strategy, have recently been built into all conventional climate-action goals. Of 400 IPCC emissions models that land us below two degrees Celsius, 344 feature negative emissions, most of them significantly. Unfortunately, negative emissions are also, at this point, almost entirely theoretical. Neither method has yet been demonstrated to actually work at anything like the necessary scale, but the natural approach, though adored by environmentalists, faces much stiffer obstacles: one researcher suggested that, to succeed, it would require a third of the world’s farmable land; another suggested that, depending on exactly how the system was designed and deployed, it might have the opposite of its intended effect, not subtracting carbon from the atmosphere but adding it.

The carbon capture path, which would blanket the planet in anti-industrial plants out of a cyberpunk dream, seems, by contrast, more inviting. To begin with, we already have the technology, though it is expensive. The devices, Wallace Smith Broecker is fond of saying, have about the same mechanical complexity as a car, and cost about as much—roughly $30,000 each. To merely match the amount of carbon we are presently emitting into the atmosphere, Broecker calculates, would require 100 million of them. This would merely buy us some time—at a cost of $30 trillion, or about 40 percent of global GDP. To reduce the level of carbon in the atmosphere just by a few parts per million—which would buy us a little more time, matching not just our present emissions but our likely level a few years down the road—would take 500 million of these devices. To reduce the level of carbon by 20 parts per million per year, he calculates, would require 1 billion of them. This would immediately pull us back from the threshold, even buy us some more time of carbon growth—which is an argument you hear against it from some corners of the environmental Left. But it would cost, you may already have calculated, $300 trillion—or nearly four times total global GDP.

These prices will likely fall, but only as emissions and atmospheric carbon continue to rise. In 2018, a paper by David Keith demonstrated a method for removing carbon at a cost perhaps as low as $94 per ton—which would make the cost of neutralizing our 32 gigatons of annual global emissions about $3 trillion. If that sounds intimidating, keep in mind, estimates for the total global fossil fuel subsidies paid out each year run as high as $5 trillion. In 2017, the same year the United States pulled out of the Paris Agreement, the country also approved a $2.3 trillion tax cut—primarily for the country’s richest, who demanded relief.