Global warming and Keynesian theory are natural bedmates, each built on the notion that only harm can come of trusting market forces. As both aim to suppress individual freedom, those who fancy themselves best equipped to regulate the world’s affairs tolerate neither naysayers nor contradictory evidence.
Let me state at the start where this is heading, since it may not be apparent from the way it begins. Two of the great intellectual disasters of our age are Keynesian economics and anthropogenic global warming (AGW). For both there is a theory which most of the specialists in each area take to be an unshakeable truth. For Keynesians, it is the belief that aggregate demand is the single most important factor determining the level of output and employment. For those who accept AGW, there is the so-called “settled science” that greenhouse gases will over the next half-century lead to an upwards movement in global temperatures with a series of ecological calamities to follow.
Both theories have had a single diagram that has provided the conceptual framework on which millions have built their understanding of what’s involved. In economics, it has been what is known as the Keynesian-cross diagram that relates aggregate demand to the level of current production. For AGW it has been what has become known as “the hockey stick”, which shows temperatures more or less flat for the past thousand years until the beginning of the twentieth century, after which they rise dramatically with no peak in sight.