Robert Reich’s 10 Economic Myths Debunked series has taken us on quite a journey. We’ve covered basic economics, campaign finance laws, and free trade, along with numerous other topics. As I anticipated in Part 1, Reich has used this series to take aim at free market proponents.
But as I hope Responding to Reich has demonstrated, the free market position has strong responses to these attacks. Throughout the series, we’ve seen how Reich needs to misrepresent our ideas—or ignore them entirely—to make his points.
Will Myth #10 be any different? Let’s take a look.
The Economics of Environmentalism
For his last episode, Reich chose the topic of climate change and the environment, with the title “Unconstrained Economic Growth Is Good”:
Many people fall for this lie: “Unconstrained economic growth is always good.” That’s bunk.
Unconstrained economic growth is causing such grave harm to the climate that its costs are likely to be greater than the gains. Mainstream economists don’t measure the costs of growth. They talk about climate change as a so-called “externality” as if it were just incidental to growth. Wrong.
If you consider the deaths and injuries caused by chemical pollution, wildfires, more intense hurricanes and storms, the costs of growth are huge.
Reich’s assertion that the “costs are likely to be greater than the gains” is a bold claim. If he wants to convince us that this is true, he needs to explain how he came to that conclusion. Unfortunately, neither this section nor the rest of the video really explains. He asserts that the costs are “huge,” but even if that’s true, it doesn’t demonstrate that they’re bigger than the benefits.
Reich’s presentation of the “externality” concept also strikes me as somewhat misleading. Economists don’t use the term “externality” to downplay the issue, as Reich insinuates. That’s simply the technical term for a particular economic phenomenon.
Reich continues:
It’s possible to shift from an economy organized around growth to one organized around sustainability. How? Dramatically reduce the use of fossil fuels. Limit what can be mined and extracted. Treat the Earth the same way we treat any limited natural resource. We prevent overfishing by limiting the amount of fish that can be taken out of the sea over a given period of time. We should also limit the amount of gunk that can be put into the air, limit how much plastic can be produced, how much of our coastlines can be developed, and how much land can be owned and developed.
In other words, if we accept that the Earth is a finite resource, let’s also agree that infinite growth will destroy the Earth. It’s already on its way.
In the interest of sustainability, Reich encourages the government to limit various types of economic activity. But this is a heavy-handed approach that risks causing far more harm than it prevents. The issues he raises are multifaceted and complex, so we need to make space for more nuanced and more sophisticated approaches—not just ban our way to “sustainability.”
As for the idea of infinite growth on a finite planet, Reich falls into the common mistake of thinking that economic growth is necessarily tied to physical growth. As I explained in a recent article, economic growth is really about value, not stuff, so the physical limitations of the planet—while very real and consequential—are not a good reason to be suspicious of continuous economic growth as such.
Learning from the Best
Looking back on Responding to Reich as a whole, a common theme has been Reich’s seeming lack of familiarity with the strongest pro-capitalist arguments. In Part 1, for instance, he seemed oblivious to Mises’s argument in Human Action about the objectivity of economics. In Part 5, he completely misconstrued our position on fair competition. And in Part 8, he put forward a position that had already been rebutted by Henry Hazlitt in 1946.
I suspect the reason for this ignorance is that Reich has largely learned about capitalism from his fellow leftists and the occasional conservative commentator, and not from knowledgeable proponents of the free market. This lack of serious study leads Reich to advance talking points that have been debunked a thousand times over by learned advocates of laissez-faire.
John Stuart Mill comments on this problem in his famous 1859 work On Liberty:
He who knows only his own side of the case, knows little of that. His reasons may be good, and no one may have been able to refute them. But if he is equally unable to refute the reasons on the opposite side; if he does not so much as know what they are, he has no ground for preferring either opinion…Nor is it enough that he should hear the arguments of adversaries from his own teachers, presented as they state them, and accompanied by what they offer as refutations…He must be able to hear them from persons who actually believe them; who defend them in earnest, and do their very utmost for them. He must know them in their most plausible and persuasive form.
These debates are important. They have real consequences for billions of people. So let’s not take the intellectually lazy route of learning about the other tribe’s ideas from our own tribe, or even from mainstream pundits who often don’t really know what they’re talking about. Let’s resolve to do our homework, to seek out the best arguments for every position, and to be open-minded enough to go where sound reasoning takes us.
Additional Reading:
The Top 5 Most Misunderstood Economic Concepts by Patrick Carroll
On Liberty by John Stuart Mill
The post Responding to Reich, Part 10: How to Have Infinite Growth on a Finite Planet was first published by the Foundation for Economic Education, and is republished here with permission. Please support their efforts.
