August 13, 2021
Climate change bears all the hallmarks of a state-sponsored crisis, useful to shift attention from other political failures. But the absence of financial accountability which characterises government actions also introduces behavioural errors.
The absence of a profit motive in any state action exposes the relationship between governments and their electors to psychological factors. We all know that governments use propaganda and other tools to manage crowd psychology and influence their electorates. What is less understood is that governments themselves are misled by a crowd psychology in its own ranks which contributes to policy failure.
This article does not question the climate change debate itself. Instead, it examines the debate in the context of the psychology driving it. The release of government-sponsored propaganda on climate change in the form of a unanimous IPCC report predicting the end of the world as we know it is the latest example of a political and bureaucratic phenomenon, making the timing of this article apposite.
Western economies have moved on from free markets to the point where they hardly exist in the true meaning of the phrase. Yet the state continually claims that it is free markets that fail, not government.
The reason governments fail in economic terms is that economic calculation is never part of their brief, and nor can it be. By economic calculation, we mean taking positive actions aimed at a profitable outcome. To survive and prosper, businesses and individuals must do this all the time — the only exception being when they can rely on the state to underwrite their failures, which is why established businesses encourage statist regulation to place hurdles in the way of upstart competitors. And why at an individual level there is a ready demand for state welfare.
But political objectives cannot involve profit and therefore economic calculation. Instead of economic calculation, a responsible state can only manage its tax revenues efficiently to minimise its impact on the producers in the economy and to achieve affordable social outcomes in the context of a realistic consensus. The problem is deciding where the line is drawn between what is reasonable and what is not. It is also the line that determines who in the distant future will go down in history as a statesman or as a political flaneur.
Political objectives in the narrowest sense were the focus in America until the days of President Hoover, who broadened the political mandate into interventionism, followed by the modern-day hero for socialist economists, Franklin D Roosevelt. Nearly a century of increasing socialistic intervention since Hoover has led us into a socio-political system whose dubious achievements are not much more than monetary debasement and the repeated failure of statist ambitions.
It’s not just America; it’s all advanced nations. Regular readers of Goldmoney articles will be aware of the inflationary consequences of promoting neo-Keynesian interventionism and to where it all leads. But over the last thirty years and more we have seen the same state-sponsoring of self-serving scientists in fields other than just economics. Especially relevant today is climate change, because this highly politicised topic is now determining the course of capital investment in the commercial sector instead of profitable objectives.
Scientists, with no experience of climatology have been jumping on the global warming bandwagon for decades, milking state funds allocated for research aimed at proving that homo stultus is responsible for global warming. And when that didn’t arrive on frequently predicted schedules, global warming was renamed climate change.
Time for a reality check
It is time for a reality check, because on flimsy evidence climate policy is becoming overtly economically destructive, more so than any other statist intervention, outside monetary policy, in peacetime. The following quote from the popular Guido Fawkes website sums it up well:
The UN has been predicting planetary disaster for decades, usually scheduled to happen in about a decade’s time. In 1972 – half a century ago – Maurice Strong, the first UN Environment Programme director warned that the world “had just 10 years to avoid catastrophe”. In 1982 his successor, Mostafa Tolba, the then head of the UN Environment Programme told the world that it had just 18 years before “an environmental catastrophe as irreversible as any nuclear holocaust”. Yet 2000 came and went and we just partied like it was 1999…
As sea levels would rise, we were told that the Maldives islands would be under water over a decade ago, they’re building more luxury hotels. We were told the source of the great Ganges River in the Himalayas, the glaciers, would have melted long ago. The great Ganges River still flows, and the glaciers are still there. The Australian Great Barrier reef would be dead, it is alive and thriving. We were told by the UN Food Programme in the sixties that Earth could not feed a growing population and that the future was bleak with much of humanity facing starvation. The earth’s population has more than doubled since the sixties with fewer people in absolute poverty…[i]
Before Maurice Strong, predictions that the end is nigh were generally confined to lunatics bearing placards, believers in predictions contained in the Book of Revelations, and leftist CND marchers. Now it is eco-warriors.
Only this week the Intergovernmental Panel on Climate Change produced the latest salvo, as a warm-up to the mega-conference on climate change in Glasgow. It was “written by hundreds of scientists and approved of by 195 countries” (Daily Telegraph, 10 August). Let’s restate that another way: “Hundreds of scientists have been paid by leading Western governments to write a report supporting these governments’ pre-agreed policies on climate change. All other governments have been corralled into approval either for fear of being dubbed deniers or fear of being left out of the subsidies they have reason to expect for supporting it from the Western nations promoting it”.
The psychology of government action, which emerges in the absence of the profit motive, is less about saving the world than about the inherent flaws in governments. The psychology of politics and bureaucracy has evolved to blind the executive to the consequences of their actions. It is a lesson in why government objectives run contra to economic progress.
Forget the argument, examine the psychology
A prejudice which is little examined is why establishments frequently stick to conviction while denying reasonable debate. There are many fields of government where this is demonstrably true, climate change being one of them.
Leadership is too often based on prevailing beliefs, with minds firmly closed to any evidence it might be wrong. Even Galileo was forced by the Inquisition in 1633 to recant his scientific evidence that the earth revolved around the sun – a thoroughly reasonable and logical though novel proposition, rejected by the Catholic establishment. But it wasn’t until 1992 that the religious establishment at the Vatican forgave him for being right. That was 359 years later and long after it mattered to Galileo.
Fortunately, when the establishment view departs from the facts it rarely survives as long. Socialism, economics, climate change and now wokeness in turn have become established in the state psyche and show the same static opinions insulated from inconvenient contradictions. This is not to say the establishment need be judgemental. Democratic government at its best tries to remain neutral and reflect a balance of opinion. But there are times when it loses sight of firm ground and becomes subverted by the psychology of its own established but unfounded beliefs.
The debate over Brexit was a classic illustration of psychology over reason, where few Remainers or Brexiteers changed their views following the referendum in 2016. Influential Remainers were, by and large, those who worked in government during the forty-five years of Britain’s increasing transfer of political power to Brussels. There are others who vehemently believe that being part of a larger economic unit is more secure than exposure to free markets. There are also those who believed Brexit would directly affect their lives and fear the uncertainty. Whatever their reasoning, their subconscious instinct is to seek protection in a guardian establishment rather than risk a commercially based proposition.
This article examines the psychology of that systemic consensus in the context of the climate debate. Climate change is only one example of a wider phenomenon and serves as a topical example. We revisit the scope of the work of Pierre Desrochers and Joanna Szurmak, both of Toronto University, who examined the longstanding link between theories of overpopulation and climate change.[ii]
Six psychological factors
Denial of something that is increasingly obvious must be down to human psychology. In Chapter 6 of Desrochers & Szurmak’s work, they identify six distinct psychological factors which we will take in turn to enhance our understanding of the psychology of climate change. I list them under the following headings:
- The iron triangle of crisis
- The psychology of entrenched arguments
- Motivated reasoning
- The core theoretical theme
- The anointed elite and
- Optimism and pessimism
The iron triangle of crisis
Even from before the time of Malthus, there have been political influencers and activists who have promoted pessimistic assumptions about uncontrolled population expansion, and the ability of the planet’s resources to feed them. Despite these fears being subsequently proved to be unfounded they continue to prevail among those who don’t need to pursue profits for a living. It is a bias to which politicians and their advisers are especially vulnerable.
The public naturally expects its elected representatives’ unbiased endeavours when bringing national threats to its attention. After all, it is arguably a primary function of government to protect its population from dangers, real and potential. There are government departments tasked with assessing dangers to society, their likelihood, and in their event how government should respond. These are tasks that require unbiased research. But political guidance from the top is rarely neutral, seeking to influence outcomes.
And we now find that climate change science has become heavily politicised.
Climate change is the gift that goes on giving to politicians. It creates an impression of tackling the big issue of our times. And it is a source of crisis giving cover for failings over lesser priorities. Observing how Boris Johnson maintains his popularity through a combination of leading the world in the battle against climate change while seeking every photo opportunity possible and at the same time presiding over the Covid disaster has been a masterclass in practical politics. One is left wondering how vacuous his politics would appear without the prop of climate change.
On his watch, the politics of climate disaster have taken on a new life in the UK. Government spending plans angled at reducing carbon emissions has accelerated, as has the support and credibility given by state-funded scientists producing alarming forecasts. Radical environmentalism is not only embraced, but actively promoted through the media.
This trinity, this iron triangle of crisis as Desrochers and Szurmak put it, is therefore comprised of establishment interests, the promotion of fear, and media management. It focuses the public’s mind on a specific threat to the exclusion of others. It is a feedback loop of career and protectionism driven by the psychology of entrenched arguments, which is our next topic.
The psychology of entrenched arguments
A rational approach to absorbing and understanding new information would be to address it logically and without bias. Clearly, this does not happen. Our brains are still wired as they were in our hunter-gatherer days when our decisions were based on a choice of fight or flight. We therefore have a natural tendency to hold onto a protected position after it becomes untenable.
Imagine being part of a community of primitive cave-dwellers and fight or flight becomes a group decision. We will support each other in uncertainty well after a crisis point has passed, breaking ranks after flight has become the only option. It is survival by inward-looking mutual defence, not attack. It is the deep psychology behind groupthink, or the psychology of entrenched arguments. It leads to the cliff-edge of crisis.
Researchers from Cornell University have examined the phenomenon.[iii] They found that “participants prefer to learn information from in-group sources and agree more with in-group members on moral and political issues”. This takes groupthink into persistence territory after the flight option has long passed, and existing views become defensively entrenched. Awareness of the true situation becomes compromised through self-ignorance of the flaws in the group’s knowledge and judgement. It even has a name: the Dunning-Kruger effect.[iv]
To this self-ignorance can be added a group’s overestimation of its understanding of controversial issues, leading to the illusion of “understanding bias”. The more members of a group who debate an issue, the more understanding bias is reinforced. You see evidence of understanding bias in wider politics, particularly when opinions coalesce over time into different political ideologies. In America, the Democrats are as intellectually capable as the Republicans, yet the two parties have retreated into sharply differing understanding biases.
Entrenched arguments are reinforced by naïve realism. A naïve realist assumes he or she personally is both rational and unbiased in the assimilation and assessment of the facts, and further assumes that those who do not reach the same conclusions are ignorant, biased or both. Naïve realism is the product of a false consensus, under which those that agree with the naïve realist are seen to be more rational than those that do not. Entrenched arguments and naïve realism become the driving force behind motivated reasoning.
We naturally believe in scientific research, on the incorrect assumption that all those PhDs from top universities conduct experiments for the same reasons as we were taught at school in chemistry lessons. Unfortunately, the scientific community’s motivation, in both the natural and social sciences, is not so pure. Scientists are human and need to earn a living, which is far easier to do if they go with the general confirmation bias. In the post-education world, a scientist needs a paid position, recognition and to publish frequently in respected journals. Good ideas become suppressed and poor data to back bad ideas are too frequently the result of this motivated reasoning.[v]
It was best summed up by John Ioannidis, a professor of medicine at Stanford University:
“Scientists in a given field may be prejudiced purely because of their belief in a scientific theory or commitment to their own findings… Prestigious investigators may suppress via the peer review process the appearance and dissemination of findings that refute their findings, thus condemning their field to perpetuate false dogma. Empirical evidence on expert opinion shows that it is extremely unreliable.”[vi]
Admittedly, Professor Ioannidis was writing about research in the natural sciences, but the methods and empirical evidence extends to the social sciences as well. It describes well the research papers published by central banks and the economist professors in universities. It is also characteristic of the opinion silos in government departments.
Motivated reasoning, such as on climate change and political correctness, is all about building a core theoretical theme.
The core theoretical theme
One way in which experts refute opposing evidence is by sticking to a core theoretical theme. I recall email correspondence I had with a well-known financial journalist in 2016, which ground to a halt when he declared,
“In my view, the record global savings rate (27pc) is the root cause of our problems. Some way must be found to rotate this into consumption to rebalance the global economy.”
In other words, he adhered to a core theoretical theme common to neo-Keynesian economists. By expressing it as his view, he was obviously not prepared to debate why he held that the record global savings rate was the root cause of our problems. We are not judging whether it is correct, only that he holds it, he assumes it. He was signalling he will not be shifted, so further debate is pointless. This is true of all state-funded economics, which this opinion reflects. Numerous papers have been written to justify this stance. We have lived with this view since Keynes published his General Theory in 1936. As in Keynesian economics, a core theoretical theme has emerged in the climate change debate
But if Professor Ioannidis is right about empirical evidence showing expert opinion is extremely unreliable, and which appears to be confirmed in the fields of economics and monetary theory, it explains the closed minds to balanced debate in fields such as climate change. So long as a core theoretical theme is adhered to, it becomes almost impossible to overturn.
A determination to stick to the core Keynesian theme on the savings paradox is my journalist friend’s membership card for the anointed elite.
The anointed elite
Many of us want to belong, to make a difference, to enhance society. We know that to do so we must have influence and the best way to do that is to join and promote a cause that has the establishment’s support. And there is nothing like that comforting feeling of an open invitation into the parlours of the great and the good. Well-known figures in the media with this access use their fame and position to anoint themselves alongside the elite and continue to have a career for so long as they play the elite’s game.
The anointed elite was the description of the economist and political theorist, Thomas Sowell, Senior Fellow at the Hoover Institution, Stanford University. He came up with it in his pithily named 1995 book, The Vision of the Anointed: Self-congratulation as a basis for social policy.
Even though we may not recognise it at the time, we have all come across it: the independent expert frequently called on by the media for comment in a specialist field. These experts rely on being informed by government insiders. They adopt the expert mantle, but it is never made clear that they owe their media status almost entirely to their membership of a government-anointed elite and their support of the elite’s objectives. But if they are stupid enough to turn critic, they will be immediately unanointed and they know it.
It applies to ex-politicians and media correspondents alike. If, say, a correspondent for a national newspaper doesn’t play along, he risks being dropped from background briefings by the elite, while his confrères at other journals continue to be invited. “That journalist from the Daily Screech is unreliable. Best not include him in our off-the-record briefings.” The threat of exclusion is the surest way for the elite to ensure that its message is the one that prevails.
Optimists v. pessimists
The glass-half-full optimists and the glass-half-empty pessimists are not split evenly across two sides of an issue. In practice, the establishment and those with a position in society are protective and pessimistic about change because it is a threat to their established position, while commercially minded outsiders tend to take a more positive view.
Psychologists tell us that as humans we have two personalities. One half of us protects what we have, giving us a sense of location, property, and home. The other half is a traveller in search of new vistas, foreign relationships, and trade. Journalist and activist Jane Jacobs (of New York City and then Toronto) identified and described these two patterns of moral precepts as guardian and commercial syndromes.[vii]
According to Jacobs, we have a different mix of these characteristics as individuals, communities and even at national levels. The two syndromes show different characters, which is why some of us are adventurers and others home birds. Commercial relationships are outgoing, and honesty in business is rewarded, while guardians are protective, favour loyalty and support the establishment. Commercials shun force and come to voluntary agreements, while guardians shun trading and exert prowess. Commercials are collaborative, competitive and respect contracts, while guardians are exclusive, take vengeance and respect hierarchy. Commercials are open to inventiveness and novelty, while guardians expect obedience and discipline. And so on.
The commercials’ activities encompass work in making and trading, while the guardians are political leaders, administrators, educators, and upholders of the law. The two syndromes are a neat explanation for the different mindsets and social duties of the private sector compared with governments.
The consequences of climate change politics
The purpose of this article is not to enter the climate change debate but to examine the flaws in the process. Realistically, it is too late to question the line being pursued, having gone beyond any influencer’s control. It is common knowledge that the science is politically influenced by state funding. But it is not widely appreciated that the process of hyping up climate change into a full-blown crisis has become the consequence of a crowd psychology rather than a pursuit of the facts.
The political advantages of introducing legislative targets for climate policies in 2030 or 2040 is that they are sufficiently far away for current politicians to have dumped the problem onto their successors. Without carbon fuels and having subsidised unreliable wind and solar energy to the point where other energy sources, notably nuclear, are uneconomic, the cost of climate change politics threatens to be ruinous for economic activity in the future, threatening the tax base and therefore the expenditure of the governments which have thoughtlessly promoted it.