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Wednesday, December 11, 2013

Are the Global Cooling Deniers Circling the Drain?

Although the media continues its shrill cry that "all is well" with global warming theory (and, that, therefore, we are all doomed), it appears that financial parasites that have prospered off the global warming scare are perhaps moving on to new things, as the movement begins the slow process of committing suicide. My impetus for making the latter comment is an article in Spiegel Online--an essay by Harald Welzer, who is a psychologist, but plays at being a climate scientist for the media. Noting that the recent Warsaw conference revealed that most nations don't regard global warming as an imminent threat, Welzer speculates that the problem is that global warming fanatics work within the capitalist system, and that the only viable path forward is by working outside the system.

Welzer has a couple ideas in that regard. First, he argues for greater government largess to companies that join in the global warming delusion. He writes:

This means we need a method of searching for new strategies that can't be coopted by the sleek, but unfortunately destructive, principle of capitalism. Imagine, for example, what might happen if a large number of businesses make the improvement of the common good -- instead of an increase in their profits -- the goal of their commercial efforts.
 
There are in fact already more than 1,400 companies, if small ones, in German-speaking countries that have made a commitment to the concept of the "economy for the common good," an idea developed a few years ago by Christian Felber, the Austrian co-founder of Attac. Around one third of these companies have annual balance statements to show it. 
In the medium term, the "economy for the common good" movement aims to make such accounting legally binding. The principle is that the more common-good "points" a business achieves, the more legal benefits it should enjoy. For example, companies with a positive common-good balance could benefit from lower taxes, obtain loans from national banks at lower interest rates and be given priority in public purchasing and the awarding of contracts. This reversal of the existing incentive system would serve to make products and services that are produced and traded fairly, and are environmentally sustainable, cheaper than ethically problematic products and nondurable, disposable items.
It sounds to me like another way to have the public subsidize businesses that cater to the elites. Of course, catering to the elites is what socialism is all about. Sort of like when a city purchases land to protect the picturesque views of the wealthy, but explain that the purchase was for reasons of environmental protection.

His second idea is to drive all other businesses into bankruptcy:
Another, even more effective, instrument for creating this sort of change is the "Fossil Free" divestment campaign launched last year by American environmental activist Bill McKibben. This movement is based on the simple idea that entire industries' commercial foundation can be destroyed if funds are withdrawn from them. Private financial investment alone already amounts to a considerable sum. But serious clout could be achieved if the endowments of American colleges and universities, the assets of church organizations and city budgets, were no longer invested in companies that destroy the foundations of future human survival.

Such initiatives are now active at nearly 400 American schools, colleges and universities. Four colleges and 10 cities, including Seattle and San Francisco, have made the decision to divest. The campaign has also spread to Europe, where University College London just joined the movement.
 
We only need to think of the wealth of assets held by foundations here in Germany to see just how much capital could be divested from the wrong purposes. This is especially true if we follow a traditional capitalistic mode of thinking and further consider that the businesses affected by this divestment would no longer present good investment opportunities even for those investors who don't care how their returns are generated.
Note his use of the term "common good," as if his idea of good is the "truth," and anyone who disagrees with him is bad. This is the common badge of all socialist tyranny.

His ideas must both be implemented to work--and will only do so for a short time. Obviously, people and institutions invest in order to obtain a return on their investment--i.e., income. Few of these investments actually go to new businesses, but instead go to existing businesses with a proven track record. There are only two ways to make money off of an investment. The old fashioned way was to earn dividends from a company--i.e., distributed profits. The newer way is to buy shares of stock at a lower value, and sell at a higher value, realizing a profit from the difference in prices. However, the price of stock is still, at some level, related to whether the stock can produce dividends, which rely on the business generating profits.

The traditional method for a business to generate profits is to sell a product or service at some price greater than the business cost. Where there is competition between businesses, a business will have to work to attract business by producing either a better product (or at least, one perceived to be better), a cheaper product, or both. Here is the rub, though. To reduce costs (and generate profits) the company needs inexpensive inputs, whether labor, energy, or materials. Welzer doesn't like that, however, because he wants to force everyone to use green (as in, costing lots of dollars) energy. A company that chooses to use more expensive energy is electing to raise it production costs, and thereby potentially reduce its profits.

Welzer (and any socialist or crony capitalist) advises the solution of subsidies. That is, instead of relying on sales, a business receives funding from the public to artificially boost its revenues and, therefore, profits. Since investors don't care where the increased profits come from, this artificial boost will make the business attractive to investors. Welzer realizes that this is the only way to get investors to switch to "good" companies. This can't go on forever, though, for the simple reason that eventually you run out of other people's money. Subsidies is just a fancy word for eating your seed grain.

The problem for Welzer, and for any other socialist, is that what he rails against isn't "capitalism," but natural laws of aggregate behavior, commonly referred to as economic principles. He may see it as the natural order that some poor bloke working a dead end job, and his children, should be perpetually stuck in their position, merely to serve his self-serving vision of utopia. But that is not the purpose of our lives and being; instead, we try to make things better for ourselves and our children, by creating wealth and prosperity, increasing our standard of living.

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