Commentary: Who’s afraid of the Green New Deal?

Published 1:30 am Sunday, October 6, 2019

By Robert Scott Gassler / For The Herald

With the recent activities by Greta Thunberg and the latest Intergovernmental Panel on Climate Change report, climate change has come back into the news. Under these circumstances, it becomes more importan to understand the Green New Deal passed by Democrats in the House.

The Green New Deal was proposed by the Progressive wing of the Democratic Party, and in some circles was immediately attacked for being too leftist. In fact, the Green New Deal is based on sound, mainstream economic principles.

(If you want to see the actual proposal, go to tinyurl.com/CongressGND.)

There are three main issues addressed by the proposal: climate change, inequality and infrastructure. The language is that of goals and general objectives, not of specific policies, but their interrelatedness is properly stressed.

The first goal is the restoration and preservation of the environment. Economist and Christian Kenneth Boulding laid out the issues in 1966 in his famous article “The Economics of the Coming Spaceship Earth.” For more than a half-century it has been established that environmental regulation does not significantly increase business costs, and that spending on environmental improvements creates jobs and income just like spending on anything else. So action to preserve and restore our sacred environment is consistent with sound economic policy.

Libertarian biologist Garrett Hardin wrote in 1968 about the “Tragedy of the Commons.” We are treating our atmosphere as if it were a village common, where shepherds let their sheep overgraze, because no one owns the land. He reluctantly concluded that the only way to stop polluting the atmosphere is to have a world authority to regulate it. Elinor Ostrom, 2009 Nobel laureate in economics, showed that there are alternative arrangements that do not involve world government. Her idea was borne out by the negotiation of the treaty limiting gases that deplete the ozone layer. The same could in principle work for limiting carbon pollution.

The second goal is a fair and just transition to a world with a better climate. Any policy helps some and hurts others, and therefore for climate policy the distributional implications should be addressed. The stress is on helping “frontline and vulnerable communities:” “indigenous peoples, communities of color, migrant communities, deindustrialized communities, depopulated rural communities, the poor, low-income workers, women, the elderly, the unhoused, people with disabilities and youth.” The policies are to encourage economic development, community ownership and democratic processes. Robert Musgrave was the pioneer in distinguishing allocation functions of government from distribution ones.

The Green New Deal seems to address the need he describes for a separation of those two functions even as they are coordinated. For example, if you want to help poor communities, give them money, perhaps with strings. But don’t raise the price of whatever they sell, as was done with U.S. farm policy; let the market determine that.

For workers in general, the Green New Deal stresses high-quality union jobs and strong labor protection. Given that the document mentions this in several places, it is surprising that it has not gotten more support from unions.

Health care is included in the resolution. Economists across the spectrum, even at the Heritage Foundation, supported Obamacare. Education is also there: Adam Smith, founder of economics, devoted a whole chapter of his “Wealth of Nations” on the need for education in a capitalist society.

As for universal basic income, various proposals have been made or supported by such rightist economists as Milton Friedman and Friedrich Hayek, and the need for them by centrist Tjalling Koopmans. It should be obvious that extreme poverty limits liberty.

The third goal is the repair and renewal of infrastructure. As far back as 1982, conservative economist George Stigler was criticizing the federal government for failing to address the crumbling infrastructure in the country. Since then there has been no concerted effort to address the problem.

The Green New Deal has been falsely accused of advocating socialism. It does not.

There is one reference to providing “adequate capital” to community organizations “in a way that ensures that the public receives appropriate ownership stakes and returns on investment,” but it does not extend to large-scale investment project by the Federal Government. There is also reference to a policy “guaranteeing a job with a family-sustaining wage, adequate family and medical leave, paid vacations, and retirement security to all people of the United States,” which is more problematic, especially to those of us who oppose “national service” proposals. The universal basic income proposal should be enough, if it is high enough.

Therefore, with the possible exceptions mentioned, the Green New Deal is clearly consistent with mainstream – even conservative – economic thinking.

Robert Scott Gassler has taught economics at Edmonds Community College. He lives in Everett.