Good morning, Clive. And thanks very much for giving some of your time to talk to The Mint today.
Good morning. Thanks for inviting me.
I was just wanting to talk really about where things are at with the economics of biodiversity and land and so on, particularly in the light of The Dasgupta Report. Which you provide an excellent commentary on as how really it’s the same as the nineties, goes back to the Pierce days of environmental economics and valuation. I mean, why has there been no progress really in this area over 30, 40 years?
I think there has been quite a lot of changes. I mean, The Dasgupta Review is interesting in that it’s an attempt to actually go backwards. And why is The Dasgupta Review actually being pushed by the government, by the Treasury Department and so on.
And you see this repeatedly, we’ve seen it with the Stern Review as well. Whenever there is a rising concern and the crisis gets worse, then you get a mainstream reaction. Dasgupta is nothing new, of course, because it’s basically just trying to revive the same old solutions that have failed at time and time again, cost-benefit analysis, making things, trade-offs. And the changes that have occurred though are actually the increasing financialization of nature and the massive markets that are being set up. This is a big change over the last 40 years.
When Pierce stated, Pierce was around 40 years ago, it was all about advising government departments and trying to get valuation on. Valuation is no longer the issue. The Dasgupta Review is pathetic on valuation. Dasgupta has never been done any valuation himself, he’s not a cost-benefit person. He’s a theoretical, optimization, neoclassical economist, and this is evident in the review. If you look at the coverage of the review, the chapter on biodiversity itself is about 3.5% of the entire review.
So you have 600 pages and you have this very small section on biodiversity, of which there are only a few pages on valuation. And yet this is central to his entire theoretical approach. His entire approach is about accounting prices and that he is going to value biodiversity, but he doesn’t tell you how he’s going to do it because it can’t be done. I spent 20 years working on valuation. I have a book on cost-benefits and analysis in the environment. And I can tell you, it’s totally theoretically unfounded what he’s suggesting it can’t be done in theory, and it can’t be done in practise for sure.
So what’s the point of all this? The point of all this is, if you look at who is stating Dasgupta, who is inviting him, who is having him speak, it’s the financial banking sector. So the big change is that the finance and banking boys have all come on board, and they’ve come on board because they want to set up new markets. We’re talking about everything from carbon trading through to biodiversity offsets. And this is the new area, this is the new thing. You don’t need valuation anymore, what you need is markets, new institutions. That’s what the Dasgupta Review is all about, valuation is irrelevant.
No, I totally get that, but if doesn’t … I mean, as far as I could see, and obviously I haven’t read all 600 pages, he doesn’t talk a lot about markets, does he?
He doesn’t need to, you see. It’s the classic neoclassical economist approach. You set up all the problems that everybody else has talked about and you seem to be taking them very serious. You talk about future generations, you talk about environmental crisis, you talk about social inequity. You talk about uncertainty and ignorance.
And then what do you do is you squeeze it all into this little box of neoclassical thinking where everything is redefined. So uncertainty and ignorance becomes risk and risk is a risk assessment, and risk assessment can be done by financial managers. You talk about values and all these different values that you can have and you seem to be extremely concerned about ethics and other people, and then what do you do, is you squeeze it all down to monetary valuation. So everything is now monetary value, which can be handled by what? Financials banking sector.
You talk about all the different problems with markets and prices, and then you talk about how some miraculous, benevolent, enlightened person actually is a woman. Very enlightened of Dasgupta, he always use a woman in this context now. So they have this female dictator who’s going to tell us what all the prices in the economy will be. They’re going to be calculated miraculously somehow, but it’s all then squeezed down, all the value are squeezed down.
So what you’re doing is you’re framing everything in terms of capitalism and markets, that’s what you’re doing. It’s a framing exercise to say, “Look, all those problems that people are talking about can all be squeezed into this little box.” You don’t have to talk about what you’re going do, the policy approach is already being set up.
But I suppose, taking his logic at least and the fact that these markets are growing, presumably he would accept that they need this female civil activist to create all of the right prices for the capital markets to work.
Yeah, so this is the tricky business in this, isn’t it? Because when you see what’s going on, neoclassical economics, if you go back to what seems like the socialist calculation debate in the twenties and thirties, it had a central planner. The lie of the whole thing is that there is a central planner who is the determining the prices.
Now who sets up all those shadow prices, who calculates all those shadow prices? Well, this is done by a centralised bureaucracy. But the lie here is that apparently the markets are going to do this once the prices have been adjusted. So you’ve got a total contradiction between the central planning system, that is meant to come up with the prices, and the free market, which is supposed to allocate resources efficiently. Well, if you’ve centrally planned all the prices, you don’t have a free market. And this is the lie of the whole thing.
So why do the finance sector just think, “Oh well, that’s a good cover.” I mean, it’s all nonsense, isn’t it? I mean, to a large extent.
It is all nonsense, yes. But the finance sector, they don’t care about this because what this does is it creates a screen. So here you have this person who is now a Cambridge economist, who’s highly rated, just like Stern was, put up there on a pedestal. And they say, “Ah, this is a enlightened approach of economics to the environment. And capitalism can do what it normally does and it can run efficiently.” That’s the whole story.
And then what you’d have is the real thing, is the real economy, with the power brokers and the bankers and the financiers, who are just going to do what they’re doing anyway, which has no relationship at all to what Dasgupta is talking about. There is no social accounting prices, there is no intervention by a central planner. What there are is markets set up and run for trading to just make money. And that’s what’s going on, so issuing new financial instruments.
But even more than that, what you have to do to get to market to operate is you need government support. So you’ve got to have the government and the institutions of government to back your markets. And how do you get trading on offsets? People won’t do offsets unless it’s regulated.
What you’re trying to do is remove the planning restrictions and put in markets that allow trade-offs. So if we take this urban sprawl, for example. Urban sprawl regulated stopped, you set up a green belt. Ah, no, we can reverse this now, because what we can do now is you can build anywhere as long as you offset it. But that requires government to be on board to change the regulations.
Now this is a game of getting the power change away from the planning system, actually, and into the hands of the market system so that you can start building and constructing and doing whatever you want. And you can destroy the entire Oxfordshire’s countryside and offset it by recreating something in the Amazon.
And it’s a lot more biodiverse than the Oxford countryside so get rid of it. It’s obviously a good trade-off and then you get a net benefit. Because now we’ve got more biodiversity because we’ve recreated some part of the Amazon that we destroyed earlier anyway.
Now it has to be said that net biodiversity gain has to be in the UK.
Yeah, okay. It may be, but this is what they’re pushing for is international trading. If you look at the carbon markets, they start nationally. They maybe even start regionally, and then it becomes more and more relaxed as the market grows and gets bigger. And they say, “Oh, well it’s not very efficient just to restrict it to the UK. Let’s do it broader and broader, get more and more people on board.”
Even if you do the UK, of course, it’s still highly problematic because people with their local environment will lose it. So you will lose Oxfordshire countryside or you lose the green belt around London, you have the M25, blah, blah, blah, and so and so forth. And you build on it and then you say, “Oh well, we’re going to do something in the North of England.” Well, great, so everybody in South England can lose their environment and they’ll have to go to the North of England to get it, or so on and so forth.
And why do you think the environmental NGOs have been … Or some of them, or the WWF, RSPB as you point out, the sainted David Attenborough, they have been supportive seemingly, what’s going on there?
I mean, David Attenborough is an extremely naive person, I would say. I would say that if you look at his wildlife programmes there’s never a human in them. You go through 30 years of wildlife programmes, where is the social aspect? I mean, the man is talking about animals all the time, but he never talks about humans and human interaction. So he has absolutely no understanding of the economy or the interactions between economic and social systems and the environment. It’s basically back to a Jacques Cousteau type of approach to conservation back in the fifties and sixties. Great for raising public awareness is about wildlife and the beauty of nature, but absolutely useless in the social ecological crisis that we’re facing.
So what’s he done, he’s jumping onboard on the bandwagon. I mean, I don’t know where he stands politically. Quite often it’s interesting to look at it, but presumably he’s extremely conservative and therefore he also wants to maintain the current system, the economic system, the way that it is, with the structure it has. Without looking at actually the chain and supply chain issues and the other aspects.
The environmental movement more generally, if you look at what’s gone on there, is there’s been a complete neoliberalization of the environmental movement. It’s happened from two perspectives. One is because neoliberalism, the rise of neoliberalism over the last 30 years, has become very dominant. And therefore everybody talks about market and market values. And then to get a seat at the table, this is what you are regarded as having to do. The other side of this though is actually extremely strategic from the corporations. The corporations started actually setting up shadow NGOs and also funding NGOs and infiltrating the existing NGOs, especially the big ones.
What you see is, if you look at conservation organisations, there’s studies on this and I’ve done a bit of work on this myself, you look at the boards of the big NGOs, especially in America, and you’ll find that there are corporate executives on the boards. 60 or 80% quite often of the boards is actually from the corporate wealth, from banking and finance and from big corporations. And you see this takeover effectively of these NGOs.
So the NGO movement, the environmental movement at the big level, has been taken over. That’s what I call neo environmental pragmatism. People then think that, “Ah, we have to be part of this. We have to cooperate with the big corporations, with the mining companies, with the resource extractors, with the oil industry and so on,” the ones who are actually destroying the environment. And they’re the ones that you then sit at the table with because you want to be at table with the powerful players in the society, so you don’t challenge them.
It is clearly been something that has happened over the last 20 years very strongly. And it’s been operative, you can see it in the Paris Agreement. The corporations sit at the table, the NGOs are not at the table. The corporations are the ones who were pushing the policy through. The corporations are the ones who fund the NGOs.
So the NGOs now are getting funding from them to do projects, which are corporate friendly. The offset markets are being … They use the conservation organisations. They have land, so you can improve the land, they fund the improvement of land so they can do offsets elsewhere. You see this very much. I mean, The Nature Conservancy in the US is very big on this and they really pushed what they were calling new conservation, which was basically just old fashioned development and offsetting.
And this is very clear across the conservation movement. But then you’ve also got things like the ecologists, all right. I’m a ecological economist, I work with ecologists a lot. And a lot of ecologists bought into this idea that we can price nature and that this, in a capitalist system, will save nature.
Yes. Just going back to one thing you said just early on, you said that the Dasgupta Report was a pushback. To look on the positive side, I suppose if there were a set of people who thought it was worthwhile putting quite a lot of resources and effort into the pushback if you’d be like, what are they pushing back against? And what’s the positive side for you? What are the emerging positive trends that-
It’s the people have become radicalised, so what you’ve seen … If we take before the 2008 crash, talking about capitalism was just not on the agenda. People were talking these populous things about the end of history, socialism is gone, the alternative things have gone and so on.
Since 2008, it’s been very slow. You get the crisis in 2008 and you get this opening up of criticism of capitalism, quite often by people who just want to reform capitalism. You’ve got various populous books that come out, 24 Things You Want To Know About Capitalism and so on and so forth. But actually these are written by people who are talking about reforming it, not overthrowing it.
But what you’ve seen more recently is in, like I said, the last 10 years, is a lot more radical literature, which is critical to capitalism, and young people who are disaffected by the whole system. So a whole generation coming up between their twenties and thirties now, who are basically looking at insecure jobs, being exploited, poor pay, a polluted environment, seeing things being destroyed around them. The future for them is worse than their parents and their grandparents. So their income, their insecurity, their jobs, their futures, are all on the line. The system is failing them. What you’ve got now is a younger generation who are seeing their lives looking worse. And as a result of that, there is really a political backlash now.
This is going in two directions I would say. One is the very dangerous direction towards fascism, and we saw this in the 1930s. So when you get insecurity and failure of capitalism, what you do is you get an alliance between the capitalists and the extreme right authoritarian. Because they don’t mind, it’s good for them. Capitalists can do very well out of an authoritarian system.
But at the same time, this appeals to the populists because they offer security. And therefore it’s always somebody else’s fault, the immigrants, the other, the Jews, the Blacks, whoever it would be. So you have the rise of things like Black Lives Matter. It’s not so surprising this is happening because there are divisions in society that are being created purposefully about a hate society. That’s the right wing aspect of it that’s going on. This aspect is there in terms of the way the system is developing.
But at the same time, you’ve got a revival of the left and the more radical and the more extreme kind of forms of civil protests. Like Black Lives Matter, but also things like Extinction Rebellion or Fridays For the Future, whatever, which are basically critics of the way that the neoliberalization of the environmental movement has occurred. So going back to civil protest and taking over the streets, which we haven’t really seen since the seventies, we could say.
And I suppose, particularly in the biodiversity area, and particularly an area of XR has morphed into Wild Card, hasn’t it, for demanding rewilding of the Royal estates and so on.
The fact that they’re getting defensive suggests some, at least, positive movement in challenging, but a sort of ongoing battle. And do you think this is going to be more and more around land, food, biodiversity? Because I suppose that used to be the basis for power, didn’t it? Before energy came from carbon, all power was built around controlling land.
So do you think as carbon energy becomes less of a crucial thing and survival and food, living and so forth becomes more important, land is going to become, again, the source of power.
Well, I mean, resources are the core of this. Land is definitely important. And you can see this, there is investment in land. This is also part of what these financial markets are about, is actually making more money out of land, securing land, privatising it, taking it over. Getting land out of public ownership and into private hands. A lot of this is on the move.
So for sure, and also the supply chain. But you’ve got to look at the complete supply chain. The way that the modern system developed was actually through long range transportation of food. The United Kingdom, massively dependent and North America for importing wheats in the 1800s. And this was one way to maintain the growing population. You get the growth of the British Empire, which is very much about trade and trading, food produce and basics, basic staples.
We have a lot of other problems though now, because we’ve got a much bigger population and we are dependent heavily on fossil fuels. Getting rid of fossil fuels is really not an option in terms of the way our current system is structured. If we look at the economy, I talk about it as a social provisioning system, so how do we provide for the people in our society. Currently the only way we can provide for them is with the fossil fuels due to the transportation and also the farming, the intensive farming.
What you’re talking about is Britain is not independent. It is totally dependent on imports. The British population, if you shut down the importation, within 10 days you’ll have people rioting. There will be no food in the supermarkets. So places like Britain are really, really susceptible to any change in the trade-trade relations. But also, if you cut off the fossil fuels, what are you going to replace … How are you going to get your supplies in?
But it’s also then about how we supply things. The fossil fuel engines, the kind of things that we’ve developed, they don’t just require fossil fuels, they don’t just require land. They require metals, they require all sorts of technologies that have been built in. And the way that we’ve gone down the technological route means that there are a whole range of metals that are required, that are essential, to maintaining the systems that have been set up. An entire computerised system that is in supply chains now requires you have computers, and that means that the computers require the resources.
Look at China, the Chinese are very smart people. What has China done? China has infiltrated into Africa to secure major areas where there are resources that they know will be required necessary for the future. It’s not just land, it’s also essential resources that are being cornered. And that’s the thing. Then we have this very strong association of this type of economy with the military. And if you look at the correlation between gross domestic product, the size of an economy and the size of its military, there’s a very straightforward correlation. So we have this going hand-in-hand with it.
Fighting over land and the resources, but on an international basis, for control and access, and also presumably for carbon sequestration.
Yeah. I mean, this is also something that is kind of going on, but in the background, but no one is really taking carbon sequestration that seriously. If you look at the fellow markets, they’re just there to make money. They’re not there to actually to sequester the carbon. There’s no monitoring, there’s no way that you can tell what’s being sequestered and whether it is or not. And once you’ve got the piece of paper, then all they’re concerned about is trading the piece of paper, not whether there’s any real carbon being taken out of the atmosphere.
But you can see the ideas of taking over the Amazon or maintaining forests or whatever. I mean, there’s studies going back maybe 30 years that show the fallacies of all of this. Just do back of the envelope calculations on how many trees you would need, what area of land you would need to cover. It just doesn’t work. You’ve got to stop the emissions from getting into the atmosphere in the first place, it’s been known for a long time. But the revival of this idea that we’re going to have nature based solution, that nature is somehow going to suck all the carbon out of the atmosphere, it’s just fallacious. But it’s very useful if you want to just trade pieces of paper.
Just as a final question … Where do you see the positive directions?
Yeah. I think that you’ve got to look at alternative systems. What we’ve become aware of, and I was trained as an economist, is you are trained to think there is only one economy. That there is only this capitalist economy or some form of it. And what actually, what you learn over time, is there are many types of economy. And even within capitalism, there’s many forms. And even within the capitalist system, there are different social relations. How does a local community operate? It does not operate on the basis of monetary exchanges. It operates on trust, sharing, other institutions. Institutions of how do we use this piece of land, what do we do with it, how do we use the local park? And all sorts of relationships that we have.
What you learn is that there is a complex of relations. Those complex of relations mean those are alternative types of economy that we can have. The positive side is to look at alternative forms of social provisioning systems and to start creating them and recreating them. Now people have been doing this, and so there are many that still exist. The farmers in India, for example, have a different type of economic system and they’re actually fighting against the neoliberalization of their society. If you look in South America, there are millions of people who live outside of the capitalist system and who are fighting against it and who don’t want it.
Now these people are surviving in what we would call a sustainable way. They have a different economic system. And so there are millions and millions of people, billions of people, who are outside of the system already, and they are living in ways which we need to look at. But also, there’s people within our society and our communities. Eco villages are very small, experimental, but they are attempts actually get a different type of social provisioning system operating. Quite often, totally against the odds.
You get protest movements who set up things, like the ZAD in France, which was a protest against an airport. They set up a whole social provisioning system, lasted 20 years. It wasn’t encouraged by the government, it was destroyed by their military who’d come in with the police and destroy it and burn it down and bulldoze it. And so what we should be doing is encouraging diversity within the system, not being frightened about it, and actually encouraging people to live in alternative ways.
You see this, of course, in attempts to do transition towns or local exchange currencies or so on. These are experimental approaches around alternative social provisioning systems. They all have their pros and cons and we can investigate them, but that’s what alternative economics should be about, is looking into alternative ways of living. Living without money. People seem to find this a ridiculous thing, but it’s not ridiculous at all. And I think that this is also very interesting. So starting to get serious research into alternative economic systems to operate in different ways.
If I look at the history of the rise of capitalism, for example, it rises in England, then you’ll see the enclosure movement, which is talked about, is not, enclosing a piece of land, it’s about changing hundreds and hundreds of social relationship about the way that resources were used. And the type of economies that you had there was built around all these institutional relationships in a village. Who could go to this field when, who could take the gleanings out of the field, who could collect wood from the local forest when. And there were so many rights, so being a peasant gave you tremendous rights to use all sorts of resources in your local area, regulated of course, under social institutions or social norms of behaviour.
And these are the things that are eradicated by the rise of capitalism. It takes hundreds of years, and actually ends up in the late 1700s with parliamentary acts to remove the rights from the peasants, from the copy holders, from the people who have rights to use various different resources. It’s not this Garrett Hardin, awful tragedy of the commons. The tragedy was Garrett Hardin, not the commons. But that whole story is totally fallacious because it’s not about some piece of land and some badly run commons, it’s actually about a whole range of rights that have existed for almost a thousand years and which are eroded through the rise of capital, and have to be eroded to make things into markets.
And actually funny enough, where I live now in this village called Oddington, the last major event here was the protest against enclosures in the area.
But thank you very much, Clive, that’s been really an amazing coverage of a whole range of fascinating issues. And thank you very much for giving us your time.
Well, thanks for inviting me. I enjoyed it.