Thursday, May 08, 2008

The Collectively Imagined Economy

There has been ample talk over the last several months, in the presidental campaign in particular, about so-called "green-collar" jobs. These jobs, for the uninitiated, are loosely defined as jobs that are similar to blue-collar jobs, but that help in some way to further the cause of clean, renewable energy and manufacturing, either by researching new technologies or executing newly learned skills related to such clean technologies.

This rise in demand for "green-collar" jobs has coincided with a shift in public opinion and marketing campaigns that have brought "green" to the mainstream. Both of these shifts have helped to spur an overall willingness to invest in such technologies, as investors and venture capitalists feel more assured that there will be demand for clean technologies and processes in the future.

Take, for example, everyone's favorite search engine. Google has not only pledged to become carbon neutral (by... five months ago...), but has also gone a step further and stated its sentiments that carbon is indeed a pollutant and in the future will be regulated as such, putting its money behind this opinion by behaving now as it believes it will have to in the future, when carbon is regulated and priced appropriately. From the site linked to above:

Additionally, when buying power for our data centers, Google will use a “shadow price” for carbon. This voluntary pricing of carbon will enable us to calculate a more accurate cost of power as one of the key criteria in site selection for our data centers. The cost of carbon is not yet recognized by the U.S. market, but may soon become so through legislation.

This is all independent of Google's philanthropic arm, which has its own project for clean, renewable energy.

The point of all this is to note that any economy can be thought of as the collective sentiments of the population that it encompasses. This statement is, in a sense, a counter to the argument that all this talk about a "green economy" is nothing more than a dressed up version of the "broken window" fallacy. Let's go a little deeper. For those not familiar, the broken window fallacy goes something like this: If I throw a rock through a window, someone has to come and repair the window, which increases GDP, and is therefore good for the economy. Ergo, we should all go around breaking windows.

Like I said, it's a fallacy. But it's commonly used to argue that the "green economy" is nothing more than a lot of people sinking a lot of money into something that really shouldn't have to be fixed in the first place.

However, this idea that one should view an economy as the collective sentiments of the people that it encompasses runs against this argument. If that's what an economy is, then all it takes is a groundswell of popular support (backed by people willing to pay of course) that green technologies and jobs are inherently a "good" thing for society and are worth something. There's no one particular industry or activity that should necessarily be valued or promoted over another; once those sentiments change, that's what the jobs and activities "should" be directed towards.

That's not to say that things should be left completely to whatever whim the "ignorant masses" happen to come up with. There are definitely times when the government (ideally a libertarian paternalist government) can and should step in to give that "nudge" where it's appropriate.

So come on, and join the groupthink! Just kidding - sort of.


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