This post is part of the ‘Urgent Histories’ Forum, organised by the Australian Historical Association. Lionel Frost and Martin Shanahan respond to the articles in the forum, published in History Australia.
Lionel Frost and Martin Shanahan
‘As public commentary mythologises the past in order to manage a destabilised and unknown future, what should the response of professional historians be?’, ask Yves Rees and Ben Huf, guest editors of the History Australia forum on ‘Doing History in Urgent Times’ (17.2). Four essays ‘grapple with what it means to be a historian in this alarming historical moment, and ask how historians ought to respond’. In this post, we consider how economic and business historians might respond and contribute to the community and policy debates in this field.
‘After centuries of exploitative and extractive practice’, write Tamson Pietsch and
Frances Flanagan, ‘in the near future our planet faces the potential collapse of ecological
systems and the unspooling of the social and political foundation of human societies’. The IPCC’s setting of a 12-year time horizon for emissions reductions to keep warming under 1.5°C since pre-industrial times to ‘avert runaway climate collapse’ sets a hard deadline, with the countdown reaching zero in 2030. As Pietsch and Flanagan observe, at present almost no community is equipped, standing ready with a democratic mandate to make the rapid, unprecedented transition in energy, land, urban, and industrial systems that the IPCC recommends.
Climate change is a classic ‘wicked problem’ that is difficult to solve because of its
complexity. With multiple, contested causes and interdependencies, wicked problems do not sit conveniently within the responsibility of one organisation or one frame of analysis. They call for collaborative responses from multilateral networks, transcending traditional, hierarchical governance models. They need resolution, for example, at the level of the individual consumer, where behaviour is subject to unintended consequences and misdirected incentives; where the social status of a good is as much a driver of consumption as price; where inbuilt obsolescence and the distance between consumption and the point of production all contribute to environmentally destructive outcomes. At the level of the individual firm, a privileged position for shareholder value, lack of consistency and unintended consequences of legal regulation, differences in technology or productivity, abuse of power, and unequal access to resources or markets all contribute to the creation of environmental harm.
‘Climate change is not a black and white issue’, observes geographer Mike Hulme
(https://mikehulme.org/am-i-a-denier-a-human-extinction-denier/). ‘By this I mean that
interpreting the significance of the fact that humans are altering the world’s climate is not self-evident. … The political meanings and individual and collective responses to climate change have to be worked out iteratively. They have to be negotiated within the political structures and processes we inhabit, negotiations that can’t be circumvented by an appeal to the authority of science being “on our side”’. To deliver information that contributes to the formulation of effective long-term policies in response to wicked problems, scholarly work that bridges discipline-based silos is essential. ‘Doing History in Urgent Times’ is a welcome contribution to that task.
For Hulme, the ‘rhetoric of extinction, deadlines and “too-late” has steered the public
narrative in a ‘dangerous direction’, having ‘cultivated a public sense of panic, anger, fear and grief, especially amongst young people’, (https://mikehulme.org/why-extinction-
rebellions-tactics-are-deeply-misguided/. ‘This is no basis upon which to prosecute the
serious and difficult business of initiating climate policies that will minimise human influence on the global climate. Declaring “climate emergencies” and demanding that more and more public bodies issue extravagant pledges to deliver ever more extreme promises about what will be accomplished on ever-diminishing timescales is engaging in merely performative politics’. While messages that there is a ‘cliff-edge’ to the climate system resonate with social groups predisposed to concern about climate change, to others the message can be alarmist and polarizing, restricting possibilities for bipartisan solutions. Katie Holmes’ observation that ‘the cacophonous imperative to act. Now. Before it’s too late’ is not conducive to the deep, careful thought that the problem calls for is consistent with Hulme’s argument. Ruth Morgan is also cautious about the proliferation of emergency language, ‘as its use has so often produced lasting undemocratic and unequal effects’.
A common theme of the ‘Doing History in Urgent Times’ is the link between climate
change and economic growth. ‘Industrialising capitalist societies have grown by turning the “free” work of the biosphere, of ecological processes, into capital’, writes Andrea Gaynor. Throughout the collection, the term ‘neoliberalism’ is used pejoratively, with reference to its ‘domination of socio-ecological domains and a resultant widening of social inequalities’. In A Brief History of Neoliberalism (2005), urban geographer David Harvey defines the concept as a proposition ‘that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade’. Harvey sees neoliberalism as a policy of the corporate capitalist class that emerged during the crisis of the 1970s to reverse social democratic reforms of the post-WW2 era that empowered labour, through privatisation, deregulation, and the dismantling of some public sector institutions. In this context, the business environment is promoted at the expense of the natural environment. Deadweight losses from imperfectly competitive markets, negative externalities, and inadequate public
goods provision may impact on income distribution by reducing the proportion of society that is able to benefit from market exchange.
Economic historians can contribute to these debates by drawing on evidence
evaluating how well markets have worked in the past, and use this to explore potential
alternative futures. Deidre McCloskey observes in Bourgeois Equality (2016) that while the world population has risen by a factor of seven since 1800, the capacity of people to feed, clothe, and educate themselves has risen by a factor of ten. ‘The poorest people in developed economies and billions in the poor countries have been the biggest beneficiaries of liberal economic growth. The rich became richer, true. But the poor have gas heating, cars, smallpox vaccinations, indoor plumbing, cheap travel, rights for women, low child mortality, adequate nutrition, taller bodies, doubled life expectancy, schooling for their kids, newspapers, a vote, a shot at university, and respect’. An economic historian’s instinct, therefore, is to include the costs and benefits of growth when assessing its impact on the human and natural condition.
Much of the policy implications of ‘Doing History in Urgent Times’ is directed to the
demand side of the climate change problem (reducing demand for resources through lower population growth, behaviour change, and slower rates of economic growth), rather than the supply side (technological solutions, more equal distribution of products). The resource use associated with what McCloskey calls the ‘Great Enrichment’ causes alarm as to the environmental future, but its benefits create economies of scale and the development of human capital that can be harnessed for environmental improvements. Just as electricity is associated with coal burning, C0 2 production, and pollution from cities, it has also raised production possibilities for smaller, cleaner engines, public transport, continuous light, city networks and human capital accumulation. Electricity remains the great hope for future clean energy, generated through renewable sources. Plastics, a carbon-based product carelessly discarded and now imbedded in every biosphere, is also behind advances in lighter structures,
improved human sanitation, food preservation, and longer human life spans. The outcome of the famous bet between Julian Simon and Paul Ehrlich (in which Ehrlich nominated five non- renewable metals he was sure would be higher in price in 1990 than 1980, and lost) reflects the power of market signals to adjust production to satisfy human preferences. The Great Enrichment has raised incomes, but also slowed population growth; smaller families are normal goods, as is a cleaner environment. Higher incomes raise expectations for cleaner cities and less pollution; reduced incomes as a result of ‘degrowth’ has seen larger families and dirtier environments (as in the centrally planned Eastern European economies of the 1970s).
Inequality in consumption – a negative outcome of neoliberalism and globalisation –
has created unmet aspirations for economic development, both in the developed world, and from the billion or so people who still lack adequate food, shelter, sanitation and education. Hulme sees climate change as a reminder that energy consumption is the price of meeting legitimate demands for economic development, demands that cannot be sustained without the development of substitutes for carbon fuels (https://www.mikehulme.org/wp- content/uploads/the-five-lessons-of-climate-change.pdf). Conserving the use of environmentally damaging fuels by preventing increases in consumption as their efficiency increases is required to avoid the Jevons Paradox (where increased efficiency leads to lower costs, lower prices and thus increased demand). Regulatory interventions to prevent abuse of market power and rent seeking (especially by cartels and interest groups with strong political alliances) has been ignored for most of the past 50 years, creating significant barriers to change. A further challenge lies in developing policy solutions that do not stifle the aspirations of those seeking higher living standards: entrepreneurs, those who run small businesses, and hold mortgages, and the elderly and the poor, who are most vulnerable to
rising energy costs. In liberal democracies, acceptance of effective climate policies depends on a buy-in from a heterogeneous electorate. As Morgan puts it: ‘in these urgent times, we need to galvanise and empower our audiences, not leave them hopeless’.
A major contribution that historians can make is to contribute an imaginative
perspective. Elinor Ostrom (Nobel prize in economics, 2009) demonstrated, though numerous studies, that common-pool goods have historically been developed, used, maintained, and distributed without resorting to the market or top-down directives. The economic historian, Douglass North (1993 Laureate) showed that human institutions (laws, rules and constitutions, as well as social norms and conventions) have changed over time in response to market signals, social crises, and need. Understanding historical change opens the future to alternative outcomes.
At all times, and especially now, economic and business historians have a
responsibility to ensure that history is not distorted. While climate warnings reveal the
urgency of an immediate danger, historians must also consider the longue durée. History is punctuated with significant changes of direction: economic growth is not always linear; populations do not grow without end; in every human action there are costs and benefits that are not distributed equally. A longer perspective does not necessarily provide us with comfort in our current situation, but may help dispel a propensity toward simplistic solutions, feelings of hopelessness, and inaction.