April 2, 2020

Week one of lockdown in the UK was also the first week of Spring — and this year it felt like it, weather-wise.

There was something special about the sunshine. Not a mere winter’s end, but a quality of light that struck me as out of the ordinary.

It could be just my imagination. These are strange, silent, times and the mind plays tricks. But there is a plausible external cause. Fewer flights mean fewer vapour trails (a.k.a. ‘contrails’) in the sky. These artificial clouds reflect sunlight back into space — thus reducing the amount that teaches the ground. Contrails are thus a big contributor to the phenomenon of ‘global dimming’.

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The effect is big enough to be noticed when it stops — i.e. on the rare occasions when aviation is interrupted. 9/11 was one such instance, another was April 2010, when planes were grounded by an ash cloud from the Eyjafjallajökull volcano. That too made for an exceptionally bright and splendid spring.

Affordable air travel has opened up the world to millions, indeed billions, of people. But it has also made the world a literally duller place. We associate flying with freedom, and yet some of the light has gone from our lives.

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There’s a lot that we put up with for the sake of speed. According to the World Health Organisation 1.35 million people are killed on the roads every year. A further 20 to 50 million are injured. How’s that for a global pandemic?

Note that this death toll does not include the lethal impact of exhaust fumes. The WHO estimates that 4.2 million people die every year from their exposure to all forms of outdoor air pollution. Obviously not all of that is vehicular in origin — though in the West, with our strict controls on other sources, tail pipe emissions are the main problem.

Unlike Covid-19, this is not a plague that spares our children. Furthermore, it is a force entirely under our control. We could, if we wished, make it go away. Obviously, there’d be a price to pay — and, clearly, we’re unwilling to pay it. Indeed, we won’t accept even a fraction of the pain we’re enduring in our fight against the virus .

One has to ask why one set of lives (those that would be lost to the pandemic) are worth tanking the economy for, while the other set (the victims of traffic accidents and air pollution) have to be sacrificed year in, year out.

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Of course, I’m ignoring the issue of tail risk. The road vehicle death toll, while horrific, is broadly predictable — in any one year or decade, the worst case scenario isn’t that different from median expectations. With a pandemic though, outcomes are driven by potentially exponential trends — with potentially ruinous consequences. In a ‘ normal’ year, cars may well kill more people than the virus ends up killing this year. What cars definitely won’t do, however, is push healthcare systems, indeed entire societies, to the point of collapse. We are prepared for the carnage on our roads. We have systems in place to deal with the consequences.

Another key difference is that the bulk of what we’re doing to fight the pandemic is temporary. It’s enormously expensive, of course — but at some point it will stop. In contrast, a commitment to saving the victims of the car would require a permanent change to our way of life. And that we’re not prepared to countenance.

And yet there’s a huge amount we could do to reduce road deaths without giving up cars altogether. For instance, we take it for granted that there will be cars on every residential street, but it never had to be that way. We could have used neighbourhood parking to keep the side streets traffic-free and child-friendly. These days, we could use road pricing everywhere to place hard limits on congestion and fund public transport. We could uphold a right to clean air for every child — but instead we allow idiots to run their engines outside the school gate.

Or take air travel. As an island nation we could have built our airports on the coast so that aircraft descend and ascend over water, not people. We could have balanced the right to see the world against the right to tranquility at home. We could make the aviation industry pay for what it’s doing to the planet — instead we subsidise it.

And it’s not just transport. In every aspect of modern life, we meekly accept the hammer blows of progress. Consider construction, for instance. We’ve never been in a better position to build beautiful, brilliantly designed buildings that stand the test of time. We have machinery and materials that would amaze our ancestors. We also have the necessary knowledge. The sum total of humanity’s architectural achievement is available at the click of a button. We have armies of architects, designers and planners — and ways of drawing upon the experience and insights of local residents. Always and everywhere, development could make places better.

But instead we just make them bigger, blighting our lives with ugliness and dysfunction as a careless byproduct. We can’t even make our modern dystopias interesting anymore, the insults of brutalism replaced by spreadsheet architecture.

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I could go on. In just about any field of economic activity — from agriculture to information technology — it seems that we can’t create without also destroying. Things that aren’t priced by market mechanisms, but which have value nonetheless — from local wildlife to the decentralised flow of information — are lost to us forever.

Is this just the price of progress? We can either have birds tweeting in the trees or shops full of food, but not both. Nature or abundance. Tranquility or mobility. Community or convenience. Localism or variety. That, supposedly, is the choice.

But, of course, it isn’t. As I’ve tried to show above, we can deploy our technologies with care. We can think through the consequences, correct our mistakes, direct our efforts away from danger, choose one path over another. For example, the UK has put decades of effort into making our roads safer. Our fatality rate is significantly lower than in Germany or France, it’s half the Canadian rate and a quarter of America’s. We should be proud.

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We can design a better world if we want it. So why don’t we do it more often and to a greater extent?

Fundamentally, it’s because it means constraining the most dynamic forces in our economy: speed, energy, extraction, transportation, production, consumption, demolition, construction, automation, immigration, globalisation, finance.

These are destructive forces, but they’re also creative. Try to tame them, and the risk is that we will slow down or even kill the essence of life, which is growth.

The case for growth is a powerful one. Nobody makes it better than the economist Tyler Cowen in his book Stubborn Attachments. While a lot of attention is paid to the GDP growth rate at any particular time, Cowen argues that we overlook the importance of growth as it multiplies over decades and centuries. Seemingly small differences in average growth rates can compound into radically different outcomes several generations down the line.

Accepting a less dynamic, slower economy now would mean that our great, great, great grandchildren will live in a much poorer world than they otherwise would have done. And if you’re wondering why we should care about descendants we’ll never meet, consider how you’d feel about our ancestors if they’d taken the same attitude. If, say, they’d suppressed the industrial revolution as being too disruptive of their way of life, we’d now be living in abject poverty. Never mind the temporary shutdown we’re living through now, the modern economy as we understand it wouldn’t exist at all — nor would it for generations to come.

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Therefore, within his consequentialist moral framework Cowen believes that we have a duty to keep growth going at the maximum sustainable rate. Not being a fool, he realises that economic activities can compromise that sustainability, for instance by messing up the climate. Yet within these basic constraints (and also respect for human rights), the argument is that growth is the greatest of greater goods.

What does such a worldview imply? Certainly that we should accept a little global dimming so that aviation can connect a global economy. As for pollution, then yes, within limits, it’s worth putting up with. Our paleolithic ancestors enjoyed unpolluted air, untainted water, got plenty of exercise, ate organic low carb food … and were all dead by the age of 40. I mean, would you swap with a caveman? As for too little wildlife, would you rather have too much (again, ask the cavemen)?

Further implications are that traffic accidents are a price worth paying for mobility. Lousy architecture is the price we pay for urbanisation — and a rate of development that allows countries like China to lift their people out of rural poverty. Of course, we in the West wouldn’t tolerate Chinese environmental standards, but then that stage in our development is safely in the past.

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So, then, an overwhelming case for letting the economy rip — decarbonising as we must, but otherwise allowing the forces of growth to find the path of least resistance?

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Here are three reasons why not:

The first is that some components of growth are worth a lot more than others. The most important is technological progress. Over time, it is all that matters to an economy (beyond people, of course, and the availability of natural resources). It can be amplified by other forces — like prudent finance and capable government — but ultimately, growth relies on innovation. Take that away and growth eventually stops — though it can run for a while on fumes (e.g. the debt-fuelled property speculation that is recorded as ‘growth’ in our flawed GDP statistics).

We use the word ‘breakthrough’ to describe instances of scientific or technological progress because discovery is difficult. A growth strategy based on always allowing economic activity to find the path of least resistance is therefore counter-productive. Innovation depends on resources being directed at the right challenges (the paths of fruitful resistance, if you will) and overcoming them. Necessity, not deregulation, is the mother of invention.

Secondly, growth is not the only thing that makes an enormous difference on a generational timescale. We also have to be aware of extremely unlikely but highly consequential risks — Black Swan risks. Any long-run economic calculus of the sort that Tyler Cowen advocates has to take account of the fact that the highly improbable becomes increasingly certain given enough time.

Now, those risks may be external to a high-growth economic model — like nuclear war. Or they may be intrinsic, but adjustable — like averting the dangers of climate change by switching to clean energy sources. But what if the black swan risks arise out of, or are greatly multiplied by, something that is an integral feature of our favoured economic model?

The obvious example, right now, is infectious disease in the context of globalisation. A hyper-connected world may well be the best way to maximise overall economic growth — until, that is, we’re ruined by our exposure to the food safety practices of other nations. It’s all very well bequeathing future generations the legacy of decades or centuries of high growth, but it won’t help them if they’re all dead.

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Finally, we need to ask whether the pro-growth policies that delivered growth in the past are still capable of delivering growth now and in the future. Quite frankly, the record of the neoliberal era isn’t great. Or rather it’s been great for the developing countries — thanks to all that previously invented, off-the-shelf technology waiting to made use of — but not so great for the already developed world.

Western economies have failed to maintain the rapid economic growth and social progress of the three or four decades after the Second World War. We are, to quote the title of another Tyler Cowen book, stuck in a Great Stagnation.

How do we get unstuck? Is it by flogging the dead horse of neoliberalism even harder? More deregulation, more globalisation, more inequality? New roads, airports, skyscrapers: More! More! More! Or, at some point, do we need to stand back and question the fundamentals of what we’re doing?

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Eric Weinstein likens our efforts to recreate the conditions for rapid growth to a cargo cult. Having experienced a great bounty at one point in our history, we ritualistically go through the motions of this or that pro-growth policy not understanding that it’s not in our power to conjure it up again.

Indeed, the rituals — involving, as they do, great sacrifice — are doing us more harm than good.

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Comment


  • April 15, 2020
    "Real wealth increases consumption, shifting the IS curve out to the right, thus pushing up interest rates and increasing aggregate demand. A decrease in real wealth does the opposite." This is the basis of the Pigou effect or a a real measure of improvement of wealth for the middle class. Sound... Read more

  • April 14, 2020
    Kemosabe , actually ' qui no sabe ' , which was what Tonto ( the Red Indian) called the Lone Ranger in the 1960s weekly film. Tonto means stupid, which is what the Lone Ranger called his side-kick. Qui no sabe obviously means in modern parlance ' what the f do you know '. Read more

  • April 5, 2020
    The author appears to be considerably ignorant of the extensive criticism of the fallacy that growth = increasing prosperity, and the fact that GDP is nothing remotely like a measure of economic or life-quality good. Very much on the contrary. And all this "we" "we" "we" "we". Speak for yourself... Read more

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