Unshackling Adam Smith’s invisible hand – Carbon Credits
After I wrote my blog piece, The Innovation Invitation, Jock Gill called me up and we had an interesting talk about it. He pointed out that the invitation to innovate should not be restricted new technology changing the way we communicate on campaigns. We need innovative ideas that transcend campaigning and go beyond relying solely on technology to solve our problems.
The conversation drifted to Adam Smith, and how the political spectrum is not a line, but a circle. The further to the left or right you go, the closer to those on the other side you end up. I think an interesting illustration of this is what I’ll call The Progressive Capitalist.
I must admit, I’ve only read very brief passages of Adam Smith’s Wealth of Nations, so I may be off based on some of my observations. Smith’s had big concerns about fairness and normative cultural values. Jock argued that Smith believed in a local marketplace, with local ownership and was opposed to absentee ownership and remote accumulation of capital. In a world of large multinational corporations, the market is no longer local. The playing field is not fair. A local community can no longer exert its cultural values on the businesses in its locality.
Indeed, if we are going to allow Adam Smith’s invisible hand to have an effect, we need to avoid entering trade agreements that give other countries unfair competitive advantage. For example, a country that puts disproportionate amounts of carbon dioxide into the air, a country that is essentially robbing its neighbors of a clean air and a healthy climate has an unfair advantage that would be unacceptable to Adam Smith. Instead, trade agreements should include fairness. If we want to unshackle Adam Smith’s invisible hand, we should tie our trade agreements to fairness. If we want to see a real market force, let’s require all imports to be carbon neutral. Instead of tariffs, companies would need to buy carbon offsets. Let’s tie Kyoto to all our trade agreements.
This is just a start. We should spend time thinking about how to make sure that in an increasingly flat world, Adam Smith’s invisible hand can help maximize human happiness.
permalink | Aldon Hynes | Climate Change, Economic Justice, Politics
I can confirm the accuracy of your impression of Smith. Most people who wave him like a flag do so apparently without ever having read a word of AIITWON! It’s pretty amazing. Also unsettling. But as we know, people will believe lies if repeated often enough. Or if they want to.
I’m commenting, though, because I don’t think we can afford the carbon-credit idea. I agree with your point about making trade fair, and the unfairness of pollution. But I honestly think we’re well past the point where we can pretend we’re not yet circling the drain.
I honestly don’t believe we can afford anything less than a complete shutdown of all but essential (e.g., respiration, irreducible byproducts of energy generation, etc) carbon emission. It’ll be less disruptive, in the end, than Lovelock’s scenario of species extinction and descent to warlord-tribalism.
ooops, that should have been “Jock’s impression of Smith”. Sorry!