Why the “Free” Market is Totally Lame

The good news: clean tech companies landed venture capital investments of 4.2 billion dollars last year. The bad news: weapons manufacturers, surveillance, and private security companies got 6 billion. Venture Business Research, a company that informs investment by groups like Goldman Sachs, expects the ‘exciting’ trends in the “sneakiness and things that go bang” sector to continue, and promote it as a better investment than clean energy.

In an article for The Nation (reposted at the Huffington Post), Naomi Klein pegs the trend in investments preferring disaster response to disaster prevention. She says it best:

According to Lloyd, despite all the government incentives, the really big money is turning away from clean energy technologies and banking instead on gadgets promising to seal wealthy countries and individuals into high-tech fortresses. Key growth areas in venture capitalism are private security firms selling surveillance gear and privatized emergency response.

Do read the article, it’s fascinating and short, and it’s not full of scary economic-speak. It is full of the scary way the “free” market is going to handle the climate crisis. In my debate with the Conservative Amazon, I challenged her assertion that the “free” market will fix the climate with the simple truth is that there is no real incentive for them to do so- carbon pollution and resource waste is not only free, it can significantly boost company profits. By the way- I’m using the term “free” market since the current economic system we have is not a free market at all: it merely pretends to be while accepting some government regulation (no child or slave labor) and lots of government subsidies and tax cuts- those incentives that Klein’s quote talks about.

Klein doesn’t address the sick little twist that clean technology is a security investment- as long as America is dependent on a limited resource purchased at very high and very volatile prices from foreign countries whose populations and governments tend to hate us, we will never be secure- no matter how much we invest in “security”.

I can’t fathom any good reason that “security” is now a better investment than clean tech, since they are so fundamentally related. Of course, maybe I just shouldn’t be expecting cohesive, long-term logic from people who generate money fast for a living- there’s just a better return in things that explode, I guess. Making money from clean tech requires large initial investments and can include long waits until the technology pays off. There is no way that a system based solely on “making the most money now” can solve real problems like climate change.

Government regulations mandating a clean energy future are the only reasonable way to maintain a secure country. Ok, so the typical conservative or libertarian argument is that government (which subsidizes energy businesses) shouldn’t regulate Big Energy (to produce energy that doesn’t harm the American people)- government regulation, is, after all, Bad, and anti-“free” market. If conservative/libertarian types who rely on this “free” market are as interested in security as they claim to be, they need to suck it up and regulate the market.

Well, at least there is some money headed towards common sense and the common good. Google’s not being evil now by investing in clean technology. And when Al Gore isn’t making self-deprecating movie and TV appearances, he’s working on a clean tech venture capital company in Silicon Valley. So there’s the hope to hold on to.

PS, the debate with the CA blogger is continuing- she said she’ll reply to my arguments from two weeks ago eventually, but she’s busy right now. I’ll let you know when that goes up.

Note: This post has been edited from its original version- some of the sentences have been rearranged and a few added for clarity.

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