When Will America Declare War on Climate-Change?
A “war structure” mobilization is required, which Australia could emulate – J.D. Alt
A declaration of war is a legal framework that sets in motion a process of “mobilization” in which the national government directs real resources — labour, engineering expertise, technology, material — toward the goal of defeating an enemy threat. Typically, we imagine that for “war” to be declared, the enemy must be another nation-state that substantially threatens the continued existence of our society. But requiring that a “state of war” can only exist in confrontation with another nation-state puts the cart before the horse, does it not? The United States, in 1941, did not declare war on Japan and Germany because they were nations, but because they presented conditions that were an existential threat — conditions that had to be confronted and overcome. Today, as we live through the extreme weather events and catastrophic wild-fires of 2021, it is becoming clear that climate-change is now presenting America with conditions that, if allowed to continue and grow, will pose an existential threat to our society. The question, then, is when will America declare war on climate-change?
I am not talking here about a semantic slogan, like the “war on drugs.” A formal declaration of war, as stated above, sets in motion a process of “mobilization” which requires — and authorizes — certain things that are outside the ordinary business-as-usual of market society. Mobilization creates a “war-structure” within which crucial components of market society are asked to operate. The most important characteristic of this “war-structure” of mobilization, however, is its understanding of money.
Specifically, the money for mobilization is not created by bank-loans (a la business-as-usual in the market economy). Instead, the money for mobilization is issued by the federal government, as necessary, to purchase, direct, and manage the real resources necessary to overcome the existential threat-conditions the nation confronts. There is no debate as to whether the government “has enough money,” or whether it can “increase tax revenues” to generate the money necessary, or whether it should “borrow” the money mobilization requires. As exemplified by the U.S. mobilization for World War Two, within a “war-structure,” the only debate is about what real resources are available and how they should be mobilized.
It may come as a shock to many people that this “war structure” operation of money is even possible. Today’s debate in congress over President Biden’s $4 trillion spending budget certainly encourages the public to believe it is not possible. Republicans wave the flag of “unsustainable deficits” in the air as the direst warnings of catastrophe, while Democrats scramble to find tax revenues or “wasteful spending” that can be eliminated to avoid that “catastrophe.” The daily, drumbeat-message is clear: The U.S. government doesn’t have enough money to do the things that need to be done — and can’t get the money it needs without reckless, and dangerous, disregard for the principles of sound finance.
A “war-structure” mobilization, however, has no money “deficits.” It is not even a calculation. The calculations are about things and conditions. If something that no one knows for sure is even possible — a nuclear bomb, for example — is required to overwhelm a condition that is an existential threat, the debate is not about how much it will “cost” or where to find the money to cover that cost. The debate is about what resources are necessary to design, build, test, and deploy the bomb — where to get those resources, and how to manage them to achieve the goal.
Part of the reason for this altered “understanding” of war-structure money is that the concept of “cost” is a bookkeeping entry invented and used for the calculation of “profit” in the everyday business of market society. And the calculation, or calculated prediction, of “profit” is the crucial pre-condition for the creation of money by banks — money that enables market society to hire its labour, buy its materials, package its goods, and realize its profits. Since a nuclear bomb was never going to be sold in a market for a profit, it was not possible to pay for the making of it with bank-financing. In fact, after spending nearly $29 billion (in today’s dollars) to produce the Hiroshima bomb, what was done with it? It was destroyed! From a bookkeeping perspective, then, it made no sense to calculate the “costs” of the bomb. The only calculation to be made was how to enrich either enough uranium or plutonium to the point that a bomb was feasible. The fact that it turned out to “cost” $29 billion was inconsequential.
“Principles of sound finance,” then, apply to profit-making businesses in a market society — but they do not apply to the undertaking of a mobilization to confront a condition that poses an existential threat to collective society — especially when the things that need to be undertaken and accomplished are not things that will generate financial profits. In the war against climate-change, the not-profit-making challenge of sequestering carbon is comparable to the not-profit-making challenge of mastering nuclear fission. Trying to package that challenge in a way that can be accomplished with “markets” — carbon taxes and cap-and-trade systems — is like trying to defeat Imperial Japan by creating a “market” for naval flotillas.
What I am advocating here should not be taken as: “Do what’s necessary now and figure out how to pay for it later.” The Manhattan project was paid for in real time, with real dollars. The fact that those dollars did not exist before Robert Oppenheimer arrived at Los Alamos is the whole point. Nor were they “borrowed” dollars that Oppenheimer’s grandchildren ever had to figure out how to “pay back.” They were dollars created “out of thin air” by the sovereign U.S. government to pay its citizens and businesses to do something that had to be done.
The interesting “collateral discovery” about this war-structure money was that the spending of it — to develop and build the nuclear bomb, for example — did not “cost” the American people anything at all. To the contrary, the American people—or at least those who, in our example, worked on the task of creating the bomb (130,000 of them) — got paid $29 billion (an average of $223,076 each) for their efforts. This strange, counter-intuitive “bookkeeping” is what modern money theory (MMT) is all about. It is easiest to “see” in the context of mobilizing for, and executing, a war. What is startling, however, is realizing that it holds true for any “deficit spending” by a sovereign government which issues its own fiat money: Sovereign bookkeeping deficits don’t “cost” the citizens anything. Instead, they are fiat money the citizens will have earned by providing goods and services for the collective well-being. It may well be, then, that declaring war on climate-change will do more than set the stage for America (and the rest of the world) to actually begin the work necessary to keep the global temperature rise below 2 degrees Celsius. It may be that establishing a “war-structure” understanding of money will, this time around, change how market society understands what is, ultimately, in its own profit-making interest — the long-term well-being of collective society and the ecological health of nature.
Source: Real Progressives,14 Aug 2021
Republished with the permission of the author
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