Tuesday, March 23, 2010

Market Providentialism

Some guy over at the American Enterprise Institute claims that the fact that air pollution has dramatically improved since 1980 is proof that the catastrophic predictions made by early environmentalists were wrong (and, hence, we ought to ignore all those dire predictions being made by environmentalists now, natch). As others point out here and here, this analysis neatly ignores the fact that environmental activism led to government regulation led to averting the predicted consequences of inaction.

This would not be especially noteworthy except that a similar line of "thought" can be found all over the place among those who feel that the market will provide. Running out of oil? No worries -- as the price increases, entrepreneurs will be motivated to innovate new extraction methods, new energy sources, more efficient engines, etc. (I've written a bit about this before, discussing some things said by John Romer, husband of Obama's chief economic advisor, Christina Romer.)

This providentialism always ignores the non-market activism that precedes and motivates the market activity that "solves" the problem in question. There's always a sticky point where Cassandras start screaming and marching and demanding change, and the market providentialists have a hard time fitting these Cassandras into their narratives of this, the best of all possible worlds.

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