Friday, January 30, 2015

Free markets better than climate faith

It's entirely appropriate that a few weeks ago the Pope should talk about climate change. Climate change has after all become a matter of faith, not evidence.  And given that so many faiths celebrate their religion with music, it's appropriate that Al Gore should go to Davos to announce that in June there will be a series of "Live Earth" concerts around the globe.  They will be timed to coincide with the United Nations climate change talks in Paris.  (Gore didn't say whether Clive Palmer would be at the concert in Sydney.)  Gore predicts the audience for the musical extravaganza could be 2 billion people.  That truly would make climate change one of the world's great faiths.  Only Christianity, with it's 2.2 billion adherents, is bigger.

Also in June the Vatican will release an encyclical on climate change.  It's likely it will follow the line of Pope Francis that climate change is mostly man-made.  It's less likely the encyclical will acknowledge there's been no statistically significant change in the earth's temperature for nearly two decades.  In December much of the media breathlessly reported that according to NASA 2014 was the hottest year ever.  Subsequently NASA scientists admitted that 2014 beat the previous hottest year of 2010 by two-hundredths of a degree — well within the margin of error.  We've now also found out that because of that margin of error the likelihood of last year being the hottest ever was actually only 38 per cent.

Catholic theologians spent the Middle Ages arguing about how many angels can dance on the head of a pin.  Eight hundred years later the Vatican is going to pronounce on whether an increase in the earth's temperature of two-hundredths of a degree is in practical terms any different from an increase of one-hundredth of a degree.

Pope Francis is wrong about climate change.  Sadly, he's also wrong about something far more serious than climate change, and that's economics.  When the Pope isn't talking about climate change he's tweeting about economics.  Last year he tweeted something spectacularly muddle-headed:  "Inequality is the root of social evil".

When it comes to climate change the left might succeed for a little while longer in arguing that black is white, but when it comes to economics not even the most unreconstructed former Marxist minister in the new Greek government can deny the evidence of how free-market capitalism has lifted millions of people out of poverty and starvation.  Between 1981 and 2004, 600 million people in China escaped poverty.  The story is the same the world over.  On nearly every measure, people's lives are getting better — not worse.  Two hundred years ago, about 10 per cent of the world's population could read — now 80 per cent can.  The incidence of child labour has declined by one-third over about the last decade.

The recent Oxfam report on global inequality, which of course received wall-to-wall coverage on the ABC, misses the point.  If you're living on $1.25 a day it's irrelevant that the richest 1 per cent of people in the world owned 48 per cent of global wealth.  It is revealing that none of Oxfam's nine recommendations for overcoming inequality includied the promotion of free trade and the abolition of barriers that stop poor countries exporting to rich countries.

Economic inequality and climate change are all that the left can campaign on these days.  Economic inequality is a tenth-order issue.  Economic growth and taking people out of poverty are first-order issues.  Those who profess to be concerned about inequality are either using the issue as a vehicle with which to attack free market capitalism or they're simply motivated by envy.  If Bill Gates moved to Australia tomorrow we would become a more unequal country and not a single person would notice any difference to their lives whatsoever.  A society in which one person has a million dollars and one person has $100 is a lot more unequal than a place where one person has $50 and one has $40.  To find out which is preferable we could ask one of the billion people in the world who survive on less than $1.25 a day where they'd rather live.  Or maybe we could ask Pope Francis.


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