RUTHFULLY YOURS

Saw a mad chap on Fox News who heads a group of people who want no national borders and one world government elected by, well, everyone. There will be fewer have-nots apparently. Without catching breath, he blamed the California bushfires on climate change.

There are, and have always been, I guess, eccentric people around with eccentric (unconventional and sightly strange) views. They usually do no harm and are best put up with. But what happens when large mobs take possession of eccentric views or, more correctly, when eccentric views take possession of large mobs. Nothing good is the answer. Effectively the inmates take over the asylum.

This is where we are now. Hordes of people in every land believe that we can control the climate. Hordes, particularly among those under thirty-five, believe that we can share the fruits of production much more equally. There is a large overlap.

I find it unnerving to be sane amid so many inmates. How do I know that I am sane? It’s simple really. I don’t have fanciful ideas about what mankind can control. It used to be called having one’s feet on the ground. So back to the asylum and, first, to economic equality

We know what happens when governments try to impose economic equality. People die in large numbers. Yet old ‘gurus’ devoid of sense — Bernie Sanders and Jeremy Corbyn, for instance — are heroes among many young people for proposing at best immiseration and at worst gulags. Of course, it is dressed up as fairer shares but we know where it leads.

Bill Shorten is a younger version of the old gurus. He apparently thinks that spending more on education and health while screwing the business sector is the key to riches (and, no doubt, to fairer shares). In a saner world we would pat his head and say no it isn’t, Bill.

Here is a short economics lesson: capitalism powers progress and underpins sustainability. It is by far the least worst economic system. Within capitalism, sharing is part and parcel of producing. Those adding more get more. Those adding little or nothing get little or nothing.

Divorcing sharing from producing cripples the economy. Everyone loses. Is there anything we can do? We can turn to those old standbys supply and demand. Cutting immigration might boost wages and lessen inequality. Perhaps.

When it comes to climate, do you know how many ordinary Joes, professionals and university types, who have bought the storyline, actually understand why a gaggle of guru scientists and their acolytes believe that CO2 emissions will cause the climate to warm catastrophically? Let me tell you. In my experience, none. They all seem to think that the scientists have performed watertight experiments – if they think at all.

In fact, the world is being turned upside down – coal power stations being blown up and power prices jacked up – by a mere theory turned into tendentious black-box computer models all of which have performed very badly in predicting temperature. When the facts change I change my mind, Lord Keynes was reputed to have said. When the facts disagree with our models we double down is today’s version among climate gurus.

The fault with do-gooders in the economic and climate sphere is that the economic system and the climate system are both too complex and dynamic to be understood and manipulated to produce particular outcomes. Sometimes we have to stand back in awe.

Capitalism has inbuilt mechanisms to right the economic ship after storms. A recession isn’t followed by a deeper recession and then by a deeper recession still. The economy recovers and attains new heights. And, I will add, more quickly if the government stays out of it.

Think about climate. Is it easy to construct a story in which the climate gets warmer and warmer without limit and equally cooler and cooler.

Take the alarmist view. CO2 increases. It gets slightly warmer. Evaporation increases producing powerful greenhouse water vapour in the atmosphere. Albedo (reflection of the Sun’s radiation) falls as ice melts. More heat is absorbed by the earth. And so on, ad infinitum, until it gets very hot indeed and then hotter still.

You can play the story the other way around. You don’t actually need CO2; just anything to get the process going one way or the other. In fact, of course, the climate does not behave like this. There must be inbuilt correction mechanisms like, in the case of warming, increased cloud cover reflecting back the Sun’s rays. Who knows?

Well, to be sure, climate scientists know a lot more than me. But, they still know very little of what there is to know. Equally economists know very little of what there is to know about the inner workings of economies – which is why their models perform as badly as do climate models in predicting outcomes.

What species of madness are we dealing with? Contrast it with standing back in awe. It seems to me that ‘delusions of grandeur’ fits the bill. Socialists and some climatologists have managed to convince many people that they have the answers. Absent religion and therefore thirsting for answers, the mobs of today are fertile ground for vainglorious gurus offering earthly salvation.

Peter Smith, a frequent Quadrant Online contributor, is the author of Bad Economics