Sunday, June 20, 2010

The capitalist hero

In society's hierarchy of professions or occupations, few are held in higher esteem than self-described environmentalists and humanitarians. This high regard, however, is frequently divorced from any real accomplishments people who embrace such labels can point to. Rather, their status is accorded based on intentions, which are noble by definition.

Environmentalists have some very real heroes amidst their ranks, and this post is not meant as a broad condemnation of the movement. That said, self-described environmentalists have also spawned some rather terrible ideas. One example is the campaign against the use of DDT in developing countries. As Tina Rosenberg noted in 2004:
KwaZulu-Natal, the province of South Africa where Ndumo and Mosvold are located, sprayed with DDT until 1996, then stopped, in part under pressure from other nations, and switched to another insecticide. But mosquitoes proved to be resistant to the new insecticide, and malaria cases soared. Since DDT was brought back in 2000, malaria is once again under control. To South Africans, DDT is their best defense against a killer disease.
Were groups such as Greenpeace and the World Wildlife Fund who campaigned against DDT mocked and ridiculed for their insistence on a policy that increased human misery among some of the world's most vulnerable populations (the groups recanted their stance on DDT in 2005, after decades of anti-DDT advocacy)? Maybe among some on the political right, but I wouldn't say that either group has suffered a permanent stain. Identifying yourself as a supporter of either group is far more likely to be met with approval rather than opprobrium among intellectual circles in Washington or New York.

Other examples of environmental lunacy which have decreased human welfare include the campaign against genetically modified food (perhaps reaching its insane apex when Zimbabwe denied food shipments to its starving citizens over concerns it was genetically modified), the perverse impact of CAFE standards, and bans on coastal oil drilling which have resulted both in increased production in places such as Nigeria and drilling further at sea, which contributed to the current BP oil mess.

Humanitarians, meanwhile, is a catch-all term meant to include everyone from political scientists to self-described consumer advocates, advocates for the poor, and advocates for increased public aid to those in developing countries. Again, let me stress than this is not meant as a broad criticism of all people who don such labels, and many of those who work with the less fortunate -- such as Norman Borlaug -- deserve our gratitude. But by no means should such people be automatically regarded, as they frequently are, as an unquestioned force for good.

Decades of aid in the form of taxpayer money to Africa governments, for example, have accomplished little other than increased dependence and widespread corruption. Indeed, no country which has successfully escaped the ranks of the developing world can cite foreign aid as a key ingredient in its rise. This trail of failure, however, does not mean that aid advocates are castigated or in any way criticized. Indeed, they are almost invariably lauded, for while the accomplishments may be non-existent the intentions are beyond reproach.

The views of "consumer advocates," meanwhile, are frequently sought as part of various news reports even though their stances on issues such as rent control, the minimum wage and other various forms of government regulation almost invariably harm consumers because their heart is in the right place. I would venture that the overwhelming majority of self-described advocates for the poor or homeless vehemently opposed welfare reform efforts in the mid-1990s, which of course ended up proving a great boon to the people who fall into these categories.

Perhaps most outrageously, professors and other intellectuals can freely describe themselves as Marxists without it becoming a scarlet letter upon them, despite this ideology being responsible for the deaths of millions. While their views are frequently regarded as wrong or misguided, few question their moral character or intentions. I don't think I'm going out on a long limb to imagine that among many university faculties a dimmer view is taken of someone for being a devotee of Sarah Palin than the ramblings of Karl Marx.

In sharp contrast, consider how the capitalist is viewed in popular culture. Engaged in the pursuit of profit, his motives are automatically suspect. Suspicions of greed hang over the capitalist, as questions linger as to what dark intentions must lie in the heart of such a person. The capitalist is the antagonist and chief malevolent figure in any number of movies and books. Driven by greed, the capitalist's profits are thought only to be possible through various miseries first inflicted on others.

The reality, however, is that the capitalist is frequently both the true environmentalist and humanitarian. Let us imagine, for example, that a capitalist identifies a new product which can improve human welfare or somehow improve an existing product either through improved features or a lower price (failure to meet either condition likely means no one will be interested in the product). Then let us say the capitalist, seeking low labor prices, decides to build his manufacturing facility in a developing country such as Brazil. The workers hired to be employed at this plant will see their wages rise and an increased standard of living (otherwise they wouldn't take the job if it wasn't an improvement).

Let us further say that some of the workers hired were formerly self-employed as farmers, wringing out a meager existence through low-productivity farming on land formerly part of the jungle. Not only then has the worker benefited, but the environment as well, as this farmland sits fallow and reverts back to its natural state (this is far from fantasy -- in fact it is currently taking place in much of South America as economic prospects improve). The former farmer will now build widgets and buy the food he requires from a more efficient producer, likely in the United States or Canada (note here the gains from trade).

The capitalist then has improved the human condition ever so slightly through the introduction of a new product that is found to be useful, the worker sees his/her standard of living significantly increased, and the environment benefits as people become richer (boosting the case for the environmental Kuznets curve). This is why the capitalist is the real hero and deserving of our admiration. Thus, if we wish to improve the world, the best way forward is to promote those policies which best encourage capitalists to work their magic.

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