Dark green barbarians

Craig Emerson | August 20, 2008

The Australian

WHEN we look around the world and find that prosperity is rising strongly in some countries but not in others, seekers of the secret formula for success ask why. Lots of temporary causes come into play: oil discoveries, tourism fads such as safari experiences and even countries setting themselves up as tax havens. But these passing influences don't really tell us what overall government policy approaches will give a country its best chance of success in the prosperity stakes.

Since about 1990 a new body of economic thinking has attributed rising prosperity to the development and application of new ideas. These new growth theorists point out that if the history of the human race were represented by the length of a football field, then living standards were basically unchanged for the entire length of the field other than the last 5cm before the far goal line. But over that last few centimetres, living standards have increased astronomically.

This period of rapidly improving living standards began with the Enlightenment in Europe in the 18th century. New ideas were encouraged and a critical mass of thinkers and inventors was achieved. Enlightenment thinkers repudiated the mysticism and superstition of pre-Enlightenment Europe, advocating instead personal freedom, open, competitive markets and scientific endeavour.

David Hume, one of the Enlightenment figures, and a close friend of Adam Smith, summed up with his statement that a wise man proportions his belief to the evidence. Isaac Newton understood the cumulative power of ideas when he said: "If I have seen farther it is by standing on the shoulders of giants." James Watt's steam engine ushered in the Industrial Revolution and the rest, as they say, is history.

Deadly diseases were conquered and life expectancy increased. Yes it was a blood-stained 5cm, fouled by slavery, the exploitation of child labour, two world wars, state-sponsored mass starvation and genocide. Yet through the period living standards rose inexorably.

But now mysticism and superstition are making a comeback. Their revival began in the '80s with attacks on economic rationalism. Rational economic thinking was condemned in favour of economic irrationalism: ongoing protectionism, deficit financing by printing money, maintaining airlines and banks in public ownership and expanding the role of the state in the commercial world through clever devices such as WA Inc and the Tricontinental merchant bank.

By the '90s, economic irrationalists had declared competition as the new heresy, attacking the Keating government's National Competition Policy which is estimated to have increased household incomes by $3500 per annum. Twenty-first century mysticism and superstition is finding expression in the big environmental debates. Deep green extremists yearn for a return to a pre-industrial society, before the Enlightenment when faith and dogma prevailed over rational thinking and evidence-based science. In this gentle agrarian society (absent environmentally destructive hard-hoofed farm animals), human beings are tolerated, as long as they leave no carbon footprint. These deep-green crusaders have declared their opposition to coalmining even if emerging technologies were to reduce its emissions to zero, since coal is regarded as an ugly reminder of an industrial society.

Governments of Europe and the US have draped a green cloak of respectability over their farm-subsidising biofuels policies that divert massive amounts of food grain into the production of ethanol.

In the name of saving the Earth from ecological disaster, these brutal policies have been responsible for an estimated 70 per cent of the sharp increases in world food prices over the past few years, plunging an extra 100 million people into poverty.

Recycling, we are told, is a good way to do our bit saving the environment. Anyone questioning the environmental benefits of recycling is branded a heretic. In some cities, up to 80 per cent of glass collected for recycling actually ends up in landfill because the cost of separating the different colours of glass is too high. But we feel good.

As director-general of the Queensland environment department in the early '90s I inquired into the life-cycle benefits of container deposit legislation.

Glass bottles destined for reuse need to be many times the thickness of those that are melted down or disposed of in landfill. We discovered that by the time account was taken of the energy and water costs of collecting, transporting and washing the bottles, reuse of bottles was bad for the environment. We dared not release the results of the study for fear of being howled down as environmental vandals.

Recycling of some materials makes good environmental sense but of others it does not. Recycling proposals should be evaluated on the basis of good scientific evidence and not pursued simply because they make us feel good.

Consumer magazines such as Choice have begun to expose as greenwash the claims companies make about their products in an attempt to cash in on environmental ignorance.

A bottle of air freshener is claimed to be biodegradable, but only the cardboard packet is. Products are promoted as being CFC-free, a true but irrelevant claim since all CFCs were banned in the late '90s. Some items are said to be made from renewable forest products, as if some species of trees are non-renewable.

Free-range chickens and organic fruit are good. But watch out for the next innovation: free-range fruit. Can you imagine the advertisement featuring dancing fruit trees all singing in harmony: "give me land, lots of land 'neath the starry skies above, don't fence me in."

And remember, when you're told a product is 90 per cent fat-free, they're really telling you it's 10 per cent pure fat.

The message is clear: irrationality sells and any questioning of spurious environmental claims is an act of heresy.

It's time for an Australian Enlightenment, where once again reason and facts prevail over mysticism and ignorance.

Criticised for changing his mind on monetary policy during the Depression, John Maynard Keynes retorted: "When the facts change, I change my mind. What do you do, sir?"

An Australian Enlightenment would demand the best available facts as a basis for public debate and public policy making.

It would find no place for hired guns: any business consultancies that are willing to distort the facts to suit the requirements of their commercial clients and to promote them on the basis of the result of computer modelling. In computer modelling the enduring truth applies: garbage in, garbage out.

Self-serving consultants who change their assumptions to suit their clients do a great disservice to any endeavour to raise evidence-based policy over policy based on faith and superstition.

One of the Enlightenment figures enthused that an army cannot defeat a good idea.

An Australian Enlightenment would restore ideas to the place they have occupied over the last 5cm of the football field: creating prosperity and raising living standards, including those of the most vulnerable in our society.

Craig Emerson is the Minister for Small Business in the Rudd Government. This is a summary of a presentation to Consilium, organised by the Centre for Independent Studies.

Original article can be found at: http://www.theaustralian.news.com.au/story/0,25197,24209041-7583,00.html