The "Difficulty"

Why Capitalism's Money-Logic Can't Tackle Climate Change

Kyoto, Copenhagen, Paris—world leaders, scientists, and economists continue gathering in different cities around the globe to strategize, debate, and attempt to lay out a PLAN whereby Earth’s nations can work in concert to address the unfolding challenges of global warming and climate-change. The difficulty they confront is always the same: The strategizing, debating, and ensuing frustration and acrimony is never about what should be undertaken and accomplished, but how to PAY for it.

The fundamental “difficulty” of paying for an effective response to climate-change can be cast in sharp relief with a simple observation: If sequestering carbon and deploying energy systems that dramatically reduce carbon emissions were initiatives that generated enormous profits for Private Enterprise, the mechanism of capitalism would already be well on its way to meeting the challenges of a warming planet—greedily speeding up its research, development, and deployments of new zero-emission products, systems, and infrastructures as the profits roll in.

As the hub of this economic activity, banks would be lining up to create bank-dollar loans to build carbon scrubbing machines, to convert agriculture to regenerative farming, to redesign and relocate coastal cities, to replace gas-stations with electric-charging networks, to build levitating, electromagnetic bullet trains to replace jet-fueled air-travel, to replace oil pipelines with water pipelines from hydrogen-powered desalinization plants, to build electric micro-grids powered by small modular reactors.

The problem, of course, is that banks are not lining up to issue bank-dollar loans for any of these purposes—and the major corporations of the world are not focused on accomplishing them—because these initiatives DO NOT promise financial profits; they promise, instead, enormous financial losses. Which is exactly the opposite of what capitalism’s banking system is structured to accommodate.

To summarize the “difficulty,” then, limiting global temperature-rise and adapting to the unfolding climate-change already baked into the future, people and businesses are going to have to be paid astronomical sums of MONEY to do things, invent things, and build things that are not going to generate financial profits. And this leaves capitalism’s money-creating mechanisms on the sidelines. The riddle to be solved is where are the astronomical sums of money to pay for the work that must be done going to come from?

Even more “difficult,” many of the profit-making infrastructures currently owned by Private Enterprise (e.g. oil-drilling machinery, refineries, ocean-going tankers, jet-airplane fleets and airports, natural-gas power plants) will have to be decommissioned and abandoned—turning trillions of dollars in present-day revenue into trillions of dollars of losses. If Private Enterprise is not to be rendered insolvent, where will the MONEY come from to compensate for these losses?

Capitalism’s Money-Logic

Intrinsic to this dilemma is capitalism’s fundamental belief about money itself. This “money-logic” can be summarized as follows:

Money is “monetized” by the profit-making efforts of Private Enterprise—and money-capital is only to be spent on initiatives that generate more profits. Capitalism does not deny that money must also be spent for not-profit-making initiatives benefiting the collective well-being—(for example, building and maintaining interstate highways)—but holds that money for these purposes must be “captured” from the profits of capitalism. This “capture” is typically made through tax and bond mechanisms where the government sells bonds to Private Enterprise (capturing monetized profits) and then imposes taxes to pay the interest on the bonds.

This money-logic, of course, imposes mathematical limits on what can be captured and spent for the collective well-being. As it stands, capitalist nations struggle to impose enough taxes to pay for basic collective services (healthcare, education, social-security, etc.)—so the idea of “capturing” an astronomical additional sum of Private Enterprise’s profits to pay for combating climate-change is virtually impossible to contemplate. Adding to the “difficulty,” this capitalist understanding of money (and how it must be captured for the collective good) makes not-profit spending initiatives dependent on the profit-making success of Private Enterprise. This creates a double-whammy “Catch-22” for climate-change:

Capturing money to address the problem is dependent on the continued SUCCESS of the very systems that create the problem in the first place.

“Catch-22”

Thus far, the only idea world leaders, scientists, and economists have come up with to resolve the “difficulty” has been a framework of “Carbon Credits.” The structure of this framework is to capture profits from Private Enterprise in exchange (in essence) for allowing Private Enterprise to continue making its profits by emitting carbon.

CATCH-22!!

“Carbon Credits” have now devolved into a voluntary framework of corporate good-will or charity that is falling far short of the monetization that climate-change is now desperately demanding. Mathematically, it is impossible to image how such a smoke and mirrors mechanism could ever have generated the sums of money the challenge is going to require.

There is no real PLAN, then, for capitalism to address climate-change because no plan is possible within the framework of capitalism’s money-logic. This means, quite simply: If climate change is to be addressed, either capitalism must be replaced, or capitalism’s money-logic must be revised. Of these two options, the first seems infinitely more difficult, dangerous, and messy—especially in light of the fact that the second option has already been implemented and has been operational (but willfully misunderstood) for over half a century.

Behind the ancient façade of capitalism’s money-logic the mechanisms of modern fiat money show us that the “difficulty” only exists because we are looking at it through the ancient façade itself. The TRUTH is the world’s sovereign nations can issue as much sovereign fiat money as necessary to pay Private Enterprise a profit-making price to fully meet global-warming’s challenge, make-up the “losses” along the way and, in the process, create vast new pools of employment for the world’s citizens.

The “difficulty” isn’t a lack of fiat-money (which is created out of thin air by sovereign political directives)—it is the profound lack of UNDERSTANDING, goodwill, and trust necessary to issue the directives.