The 'market' won't save us from climate disaster. We must rethink our system
Expecting the free market to fix global warming is like trying to pound nails with a saw
The massive wildfires that have been rampaging across the American west this year are not purely natural disasters. They are partly products of the unnatural disaster of climate change – “unnatural”, in that the ultimate responsibility for global warming belongs not to physics but to our economic system. Nicholas Stern, the former chief economist of the World Bank, calls climate change the “greatest and widest-ranging market failure ever seen”. Sadly, climate change is only one – albeit a whopper – of the countless market failures that degrade our lives.
Though it sounds like a generic phrase, “market failure” is actually a technical term. It doesn’t refer to scams like insider trading or corporate fraud. A failure occurs when the marketplace allocates resources in a way that does not optimally deliver wellbeing. We understandably focus a lot of attention on the depredations of greedy tycoons and corporations, but many of the most consequential market failures stem from innate characteristics of our current market system.
Many of us probably already have a gut feeling that our current market system often fails. In order to build a more sustainable, just and prosperous economy, however, it’s vital that we better comprehend the shortcomings deep in the market’s DNA.
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