Economic Theory

The case against anti-producerism


Every economic transaction involves at least two sides.

Any measure that discourages economic transactions necessarily affects both sides of the bargain. You cannot clamp down on a voluntary economic activity in a way that only hurts one side. You cannot make it harder to sell X without also making it harder to buy X. You cannot make it harder to produce Y without also making it harder to consume Y. For every frustrated buyer/consumer, there must be at least one frustrated seller/producer, and for every frustrated seller/producer, there must be at least one frustrated buyer/consumer.

I feel slightly silly for spelling this out, because, put in those terms, it is such a statement of the obvious, and self-evident. (You’re probably now thinking: “Wow, groundbreaking stuff, Niemietz! Can’t believe they’ve never nominated you for the Nobel Prize in Economics.”) And yet, a large proportion of our political discourse rests on denying this obvious fact. A large part of our political discourse rests on the unspoken assumption that you can easily thwart voluntary economic transactions, and only hurt one side in the process. I’ll give you a few examples.

NIMBYism

Let’s start with my favourite bête noire, the people who are responsible for most of this country’s problems: the NIMBYs. NIMBYs are well-housed people who use their political muscle to deny housing opportunities to others. I used to wonder whether these people ever have an “Are we the baddies?” moment?

But I now know the answer: no. No they don’t. NIMBYs do just feel that they have a clean conscience; they are even convinced that they occupy the moral high-ground. How do they do that?

They do it by telling themselves a story in which housebuilding is an activity which only makes developers rich, but which serves no useful purpose otherwise. NIMBY rhetoric is all about the developers. The would-be occupiers of new housing, that is, the people who would be living in it if it were built, have been given the Nikolai Yezhov treatment: they have been airbrushed out of the story. The housing market only has a supply side. It only exists so that developers can make money.

How do developers do that? Well, they force unwanted housing on a reluctant community, destroying our beautiful countryside in the process, and then in the end, they somehow have money. They build the houses, and then the money just somehow materialises.

In this story, NIMBY campaigns only hurt the profit margins of big developers. And why would anyone feel guilty about that? Indeed, why would anyone object to that, unless they are a paid shill in the service of the Big Developers?

What is amazing is not that NIMBYs have managed to convince themselves of this, let’s say, heterodox approach to economics, but that they have managed to convince most of the rest of the country as well.

Socialist Environmentalism

Or take the new, socialist environmentalism, represented by the likes of Just Stop Oil, Extinction Rebellion, and the Greta movement.

There was a time, not so long ago, when environmentalism used to be inseparable from anti-consumerism, in that it was highly judgemental about people’s consumer choices. It made no bones about the fact that environmentalism required a drastic reduction in people’s living standards. This anti-consumerism has since been replaced by what we could call an ‘anti-producerism’. Socialist environmentalists treat the use of fossil fuels as an activity which only benefits producers, not consumers.

It is best expressed in the – fashionable but utterly meaningless – claim that “100 companies are responsible for 71% of global emissions”.

How do these companies make money? Well, they dig or pump fossil fuels out of the ground, they burn them, and then, they somehow have money. That’s it.

This gives us a trade-off-free version of environmentalism, under which we could easily eliminate most of the world’s carbon emissions by simply clamping down on a small number of polluters, and the rest of us would barely notice a difference. A few billionaires would cease to be billionaires, but the living standards of the vast majority of the population would be unaffected.

If this is so easy, why haven’t we done it already? Because we have an economic system which is geared towards the profit interests of the capitalist class, not the interests of people and the planet. The solution, therefore, is to overthrow that system, and establish one in which there is no such thing as a “capitalist class” anymore. This is where the trendy slogan “system change not climate change” comes from.

Nanny Statism

Or take Nanny Statism, the bête noire of my colleague Chris Snowdon. There is a paternalistic version of Nanny Statism, sometimes linked to Behavioural Economics, which is mainly focussed on the weaknesses of the consumer. Paternalists see the consumer as ignorant, weak-willed, impulsive, and short-termist.

You can see why this version of Nanny Statism has its limits: it inevitably comes across as a bit elitist, which is why it does not sit easily with our egalitarian culture. This is why most Nanny Statists have shifted the emphasis of their rhetoric from the consumer to the producer, presenting themselves not as paternalists, but as anti-industry campaigners.

In terms of the policies they advocate, this makes no difference. Rhetorically, it makes all the difference in the world.

To see why, imagine a YouGov poll which asked:

“Do you think politicians have a right to tell us what we are, and what we are not allowed to eat and drink? Or do you think we should be free to make our own choices, even if this means that some of us will make choices that are bad for our health?”

Even in this day and age, with classical liberalism relegated to the status of an unpopular fringe opinion, I suspect most people would answer this question in a “Snowdonite” way. Now let’s replace that with:

“Do you think multinational food and drink corporations should be allowed to make unlimited profits by aggressively marketing unhealthy products, fuelling an obesity crisis and bankrupting our NHS? Or do you think governments should sometimes prioritise the nation’s health and well-being over private profit interests?”

I suspect a poll which used the latter phrasing would produce North Korean levels of agreement.

And that, in a nutshell, explains the attraction of anti-producerism: it makes causes that would otherwise be contentious and debatable seem almost universally popular. Not everyone agrees that the state should dictate personal lifestyle choices, impoverish the country in the name of “Net Zero”, or ban housebuilding. But almost everyone hates capitalists these days.

The political Right does it too

One final thought: due to its anti-capitalist nature, anti-producerism is predominantly a left-wing phenomenon. But you can find right-wing examples of it, too. People who get exercised about the Channel crossings sometimes act as if their real beef was not with illegal immigrants, but with the people smugglers who make money by bringing them here, and their unscrupulous business practices. Now, I’m not suggesting that people smuggling is a business like any other. But it is a business which would not exist if there was no demand for it, so presenting it as a wholly supply-driven phenomenon is not an honest way of framing the argument.

The above has to be the least successful example of anti-producerism, because I doubt that anyone believes it, in this case. But if it worked, it would be a clever way to turn an anti-immigration sentiment (unfashionable, low-status, Daily Mail) into an anti-business sentiment (fashionable, high-status, Guardian).

 

Head of Political Economy

Dr Kristian Niemietz is the IEA's Editorial Director, and Head of Political Economy. Kristian studied Economics at the Humboldt Universität zu Berlin and the Universidad de Salamanca, graduating in 2007 as Diplom-Volkswirt (≈MSc in Economics). During his studies, he interned at the Central Bank of Bolivia (2004), the National Statistics Office of Paraguay (2005), and at the IEA (2006). He also studied Political Economy at King's College London, graduating in 2013 with a PhD. Kristian previously worked as a Research Fellow at the Berlin-based Institute for Free Enterprise (IUF), and taught Economics at King's College London. He is the author of the books "Socialism: The Failed Idea That Never Dies" (2019), "Universal Healthcare Without The NHS" (2016), "Redefining The Poverty Debate" (2012) and "A New Understanding of Poverty" (2011).


1 thought on “The case against anti-producerism”

  1. Posted 11/03/2024 at 15:25 | Permalink

    Thank and well thought through
    A good way of tackling negativity is counter by asking “so what solution do you propose instead” and ” how much will you contribute towards your solution”

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