Robert Hockett –
During their first weeks in the new U.S. Congress, U.S. Representative Alexandria Ocasio-Cortez and her colleagues already have done something no other American political figure has managed for decades. They have got the whole country, and indeed much of the world, talking about massively transformative public investment as a real prospect.
The ‘Green New Deal’ exceeds in scale and scope all major undertakings of U.S. federal, state, and local governments since both its namesake – Franklin Roosevelt’s original New Deal – and the mobilization effort for the Second World War in 1940s, respectively. And this is true irrespective of what measure of ‘size’ you might use – geographic and cross-sectoral scope, number of firms and sub-federal units of government apt to be playing a role, segments of the population who will be playing a role, dollar value of real expenditure, dollar value of expenditure as a percentage of GDP, … you name it.
Ambition on such a scale always draws carping and naysaying from the timid, the cynical, and the economically uninformed, and this time has been no exception. Predictable expressions of skepticism and incredulity, along with the usual ‘what about partisan gridlock’ and ‘how will you pay for it?’ queries, have abounded. Even some self-styled progressive politicians have hedged their bets, approving ‘the concept’ while studiously shying away from declaring on any particular instantiation.
Against such a backdrop, we do well to recognize that in the present case, ‘size matters’ – and matters in a way that the politically demoralized, the fiscally austere, and tepid allies alike seem to miss. The problems the Green New Deal addresses, in short, are problems where bigger is better, is imperative, and is, paradoxically, more politically feasible and ‘affordable’ too where responding is concerned.
Begin with the imperative part, if only to refresh a few memories. Climate scientists tell us that average global temperatures have now crossed a threshold, and are still climbing at a rate, that leaves us no option but to reverse course on carbon emissions post haste. The consequence of inaction will be the extinction of both the human and other species of life, while the consequences of further foot-dragging will be astronomically high costs brought by continuing and ever more frequent environmental calamities.
And this is to say nothing of the massive environmental degradation being wrought now by other, non-fossil-fuel forms of contamination – chemicals, plastics, other slow-breakdown materials, etc. Where these threats are concerned, the question we face now is not whether, but how – and how quickly – to address them.
Enter the Green New Deal. Along with her colleagues, Representative Ocasio-Cortez recognizes that the aforementioned challenges must be addressed urgently, quickly, and comprehensively. But they also recognize more – namely, that ‘going big’ here is actually to go more politically and fiscally feasibly too. That is part of what makes the Green New Deal ‘new’ and a ‘deal,’ two subjects to be taken up below. But let us first take account of what renders it ‘green.’
As we Green New Dealers envision it, the Green New Deal will comprise a full portfolio of mutually complementary and critically necessary projects. All will contribute to the restoration of both a healthy planet and a just, prosperous, and sustainable economy that treats all Americans as valued members of our society and our environment as our home. These projects include, among others:
- Building a ‘smart.’ energy-efficient national power grid to enable the transition to renewable power, including energy storage solutions and technologies and improvements that overlap with all of the other Green New Deal projects;
- Carrying out a sweeping overhaul of American transportation systems to eliminate greenhouse gas emissions from transportation and capture as much of the energy efficiency resource as is physically possible. Upgrading transportation systems to improve user experience and to get as close as possible to zero emissions;
- Replacing fossil fuel electricity generation with wind, solar and other renewables. Also expanding existing renewable power sources and deploying new production and storage capacity to meet 100% of national power demand through renewable sources;
- Upgrading every residential and industrial building for state-of-the-art energy efficiency, comfort and safety. This will create millions of new high wage jobs in every community and will be designed to foster ownership by communities, with the work being done by local firms, organizations and co-ops. It will also make startup capital available to people who want to form new firms and co-ops, and take care to invest especially in communities that have been denied capital and development for generations;
- Investing in and working with U.S. industry to eliminate greenhouse gas emissions from production and capture as much of the energy efficiency resource as is physically possible. This will involve massive investments to industrial corporations to undertake energy efficiency upgrades and do the work of transitioning away from fossil fuels;
- Investing in and working with American farmers to reduce greenhouse gas emissions from agriculture and capture as much of the energy efficiency resource as is physically possible, and to encourage transition to more sustainable, locally-focused agriculture. Also working to improve the health of farmers and farm workers and the quality of our food supply;
- Making adequate capital, technical expertise and other forms of assistance available to all communities, organizations and corporations in the nation; also investing in technological R&D to support all Green New Deal projects – for example, in battery technologies, energy efficient materials, etc.;
- Upgrading water infrastructure to ensure universal access to clean water in every community; also carrying out coastal remediation projects and other overdue ecosystem projects to protect and heal endangered and fragile ecosystems; and
- Making green technology, industry, expertise, products and services a major export of the United States, with the aim of becoming the undisputed international leader in helping other countries transition to completely greenhouse gas neutral economies and bringing about a global Green New Deal. Also promoting global cooperation and exchange of green technology, industry, expertise, products and services and encouraging a global Green New Deal
The ‘green’ character of these projects is obvious. It should also be clear, however, that together the projects involve nothing less than a comprehensive overhaul of the nation’s entire infrastructural and industrial base. It is hardly surprising that infrastructural and industrial overhaul would be green; to overhaul is to modernize, and what’s modern now just is what’s green. But its ‘overhaul’ character also is part of what makes the Green New Deal, at least in comparison to all other national projects undertaken in the past 80 years, ‘new.’
In virtue of both its fiscal and its political scale and scope, the Green New Deal truly is ‘new’ in comparison to previous environmental and economic initiatives commenced since the Second World War. And this is a very good thing. Let’s begin with the fiscal factor, then turn to the political in the Green New Deal’s guise as a ‘deal.’
The suggestion that size is a virtue where the Green New Deal’s fiscal features are concerned might ring counterintuitive at first. But if you think about it for a moment you will see very quickly its truth. There are at least three reasons, two of which we can cover quite quickly in view of their accessibility even to untutored intuition.
The first reason stems from the ‘scale economies’ familiar even to orthodox economists – not to mention most businesses. Any productive activity, including that of climate mitigation, occasions both fixed costs and variable costs. Because even small-scale activity brings fixed costs, fixed costs per unit of activity tend to diminish as the scale of activity rises. This of course means that average costs per unit decline – at least to the point at which ‘diminishing returns’ kick in in some industries. And where climate mitigation is concerned, the scale of the threat that we face is so monstrous that ‘diminishing returns’ is unlikely to become ‘a thing’ for many years to come.
The second reason that a bigger Green New Deal will be fiscally more feasible – ‘more affordable’ – than a small-bore initiative stems from the ‘snowball effect’ that we typically see in connection with most forms of environmental and infrastructural degradation. If you’ve ever noticed how much more quickly an already shrunken bar of soap washes away than does a comparable mass from a fresh bar of soap, or how one sporting injury you suffer can lead on to other injuries as you change how you walk to accommodate it, you’ll have an inkling already of what I mean.
Environmental and infrastructural degradation are like that. Their paces accelerate as early harms damage capacities to compensate for later harms. Hence the ‘cost acceleration’ phenomenon to which economists often refer, and the ‘feedback effects’ climate scientists cite as our worst perils. Most people ‘get’ this, but few seem to draw its entailment – namely, that acting faster will yield more ‘bang for the buck’ than will acting sluggishly. And ‘acting faster’ here means spending more now rather than later. Ditto the targeting first of economically disadvantaged communities – inner cities, rural outposts, etc. – for Green New Deal projects; restoring the local environment and economy of a Flint, Michigan will yield more immediate ‘payoff’ than will that of, say, Palo Alto in California.
The third fiscal reason to ‘go big’ on the Green New Deal is best considered in relation to the ubiquitous but misguided ‘how do you pay’ question. First note that ‘how do you pay’ actually is code for something else. Nations that issue money don’t have to ‘raise’ money; they ‘create’ it by spending. Hence the ‘how do you pay’ question actually proxies for a ‘what about inflation’ question – the only real constraint upon spending. But once you see this, you see another reason to ‘swing for the fences’ as we Green New Dealers urge – namely, so that our Green New Deal plans increase production and productive capacity as quickly as they grow the money supply.
The key here is that inflation – like deflation – is always relational. (Please repeat after me: inflation is a relation; inflation is a relation, inflation is a relation…) It’s about money quantity in relation to goods and services quantity. Too much money in relation to a given stock of goods and services is inflationary; too little, as we relearned in 2008, is deflationary.
But this is another reason that ‘going big’ with the Green New Deal will be far less likely to budge inflation numbers from their still stubbornly low sub-2% rates than would ‘going small.’ The Green New Deal plan is to ramp-up production and installation of all manner of new, carbon-free products, services, and infrastructure, from solar panels, windmills, and batteries, through new plants and charging stations, to ‘smart’ power grids and beyond.
The Green New Deal will accordingly not require ‘new taxes’ or ‘unsustainable debt’ while inflation is nonexistent. And since (a) well over $5 trillion in tax cut and war expenditures in recent years have not triggered inflation, (b) the Fed has yet to get inflation consistently up to its 2% target, and (c) the Green New Deal will, as just noted, produce new goods to keep pace with and absorb its expenditures, there is no more reason to let fear-mongering halt progress here than there was to let it halt wars or tax cuts.
Not since the move to a wartime economy in 1942 has the U.S. enjoyed so much ‘fiscal space’ for productive enhancement. And we must fill that space. Our looming climate catastrophes, as well as our catastrophic and still worsening poverty, opioid, and inequality crises, confront the nation with what the great American philosopher William James called ‘the moral equivalent of war.’ And when you are waging a war, especially a war for your very survival, you do not ‘low-ball’ or ‘pinch pennies.’ That would be suicide. It also would be ‘false economy.’
What’s the Deal?
The scale and scope of the Green New Deal are a breakthrough not only in relation to fiscal space, but also in relation to political space. We Green New Dealers see the initiative as the single greatest exercise in deliberative and participatory democracy that the nation has yet undertaken. It is an invitation to all who are here to ‘deal’ together with the nation’s now backward economy and dying environment. The best way to elaborate what I mean here is to begin with the Green New Deal Resolution introduced in Congress at the end of the first week of February – a document to which some 70 U.S. Representatives, 10 or more Senators, and nearly all announced Democratic Presidential have already signed on.
Accompanying all the excitement around the Green New Deal Resolution have been a few queries concerning the status of the document in the fuller Green New Deal process, along with discussions about what the brief document’s broad statements of principle, hope and aspiration will entail. The definitive reply to the latter discussions is easy: It’s up to us all. And that is because of the answer to the first query, which is that the Green New Deal Resolution is simply the opening gavel of an extended national deliberation – a deliberation that includes literally all of us and starts now.
Two facts about the original New Deal, from which the Green New Deal of course takes part of its name, bear remembering in this connection. The first is that the New Deal was never a ‘done deal,’ much less a deal that was done by day one. Rather than a single enactment passed into law early on in a single presidential administration, the New Deal was a historical process – an ongoing project of national recovery and renewal. It unfolded over the course of a decade, and took shape in the form of literally scores of statutes passed by Congress and signed into law by the President after careful study, long public hearings, and final decision. Much of its power and authority remained unsettled well into the 1940s.
The second fact of the New Deal that is helpful to remember right now is that it had projects in every precinct of the country. All Americans were to benefit, irrespective of political affiliation, vocation, or geographic location. This wasn’t only smart politics of the ‘give ‘em all a piece of this’ variety. It was meant to be inclusive. It was about using the citizenry’s commonly owned and operated instrumentality – our federal government – for the benefit of literally all of the citizenry.
This is not to say that the New Deal at all times worked equally well for all Americans. There were flaws in the planning and in the implementation, owing in part to racist and sexist assumptions undergirding programs, and to the spirit of experimentation and “trial and error” strategy deliberately adopted by the New Dealers. Without giving those serious deficiencies short shrift, the point here is that the New Deal was meant to be truly national in scope, even while also local and sectional in execution.
So what does this mean for the Green New Deal? It means first that the Green New Deal too will develop organically over the course of a decade – a decade in which literally all Americans will be proposing, critiquing, and counter-proposing, all in a spirit of joint deliberation about how best to rescue our planet and rejuvenate our economy and society in the process. And it means second that we Green New Dealers intend, without cavil or qualification, and without shame or embarrassment, for the Green New Deal to benefit literally all Americans. All of them. And since our times are happily less racist and sexist than were earlier times, ‘all’ here means all genders and ethnicities far more literally than it did in the 1930s and -40s.
Let us then close with a metaphor, one that strikes me as uniquely fitting both of the present occasion and of its predecessor occasion in the original New Deal.
When she began her orientation as NY-14’s new Representative in the new House of Representatives last month, Representative Ocasio-Cortez delighted her constituents and many more Americans by posting phone video footage of each day’s events on social media platforms. What charmed so many about this was how it included all those who had voted for and otherwise supported the Congresswoman in the experience of assuming her responsibilities as their Representative. They were there with her, just as assuredly as they’d put her there.
This was participation in government – this was democracy – of a kind we’ve not seen since that last great user of new media to share with his constituents, Franklin Roosevelt, entered “America’s living rooms” regularly in his “fireside chats” in the 1930s. This is precisely how those of us working on the Green New Deal want it to proceed. We want it to develop organically over a decade just as the first New Deal did. We want it to do so with the benefit of literally all Americans’ wisdom and ideas. And we want it to work for the benefit of literally all of them too.
Only this way will we get our Green New Deal right. Only this way will we get it both suitably green and properly democratic. And only this way will it be a ‘deal’ that is veritably ‘new.’
Robert Hockett (@rch371 ) is Edward Cornell Professor of Law at Cornell Law School.