Chasing Rainbows: A review
Tim Worstall has, with touching quaintness, written a book. Chasing Rainbows claims to be about how the “green agenda defeats its aims.” I’m not sure this is a good description; Tim never quite defines clearly what the “green agenda” is. Instead, I’d rather read it as a (partisan) economist’s take on environmental questions. In doing so, he demonstrates both the strengths and weaknesses we see in his blog.One of these is a clarity of exposition. By economists’ standards - a low bar, admittedly - Tim writes very well, although some readers might find his snarkiness a little wearing. And there are some brilliant flourishes. His idiot cousin metaphor for comparative advantage verges on the genius.There’s also the ability to show that basic economic concepts - opportunity cost, comparative advantage, Pigovian tax - have everyday practical applications. This skill is, I fear, under-rated; it’s very easy even for economists to understand these ideas in theory, but forget their usefulness. As a result, Tim scores some great successes; his discussion of carbon taxes; of the role of markets in promoting growth; and the link between prosperity and fertility are spot on.However, I have three problems with it - which, I suspect, we often see in his blog.First, there is - as Paul points out - a tendency to under-rate the intelligence of his opponents. This is most evident in his claim, in chapter one, that jobs are a cost, not a benefit. This is certainly true in a world of full employment. In such a world, a “green job” means there’s one less worker to do something else. But we don’t live in such a world. The alternative to “green jobs” is not people being more productive elsewhere, but rather them lying around on the dole. And given that unemployment is a massive source of unhappiness, this is a bad thing. Yes, it’s true that, as individuals, we want to minimize effort. But in a world where risks are not pooled adequately, this is not true for society. In such a world, “green jobs” might be equivalent to Keynes’ paying men to dig holes and fill them in again - a way of pump-priming aggregate demand. Of course, there are arguments against this, and Tim knows them. And it’s also true that greens - to their discredit - don’t often present their job creation in such Keynesian terms. But the point is that Tim doesn’t take the debate beyond the “jobs are a cost, not a benefit” line. This is excessively simple.Secondly, there’s a failure to ask: is this a big problem or a little one? For me, this leaps out of his discussion of recycling. He’s entirely correct to say that advocates of recycling ignore the effort involved in doing so. But is this really a significant issue? Here in Rutland, recycling consists merely of chucking rubbish into one of three bins - which is no effort at all. I fear that, in giving weight to trivial issues, Tim is guilty of a common error amongst free market economists, of over-estimating the importance of small deviations from full optimality.Thirdly, there’s a tendency sometimes to attack a weak argument rather than a strong one. Thankfully, the dread name of Richard Murphy doesn’t appear in this book. But Tim’s Quixotic attack on irrelevant targets does. He argues, convincingly, that “the physical world is not the defining limit upon economic growth; human ingenuity is”. This is true. But this doesn’t take us far. It’s quite possible that we’re heading for lower growth not because of pure resource constraints, but the race between diminishing returns and technical progress - which has always been the determinant of growth - is becoming tighter. You can interpret high commodity prices and firms’ reluctance to invest as evidence that the smart money believes that David Ricardo’s “stationary state” is, at least, a credible scenario. In tilting at the windmill of resource constraints, Tim doesn’t consider this more sensible possibility.I don’t say all this to diminish the value of this book. If I were an economics teacher, I’d recommend it as holiday reading for my students, in the hope that they’d see how textbook concepts can be used - and that my greener students will be stimulated to think more clearly.