what should we make of repeated calls for 'getting carbon prices right' or 'trusting the power of price signals' #COP26?
it's code, we worry w @IsabellaMWeber, for #CarbonShockTherapy coming to a Global South country near you
ft.com/content/1d2dcd…
it's code, we worry w @IsabellaMWeber, for #CarbonShockTherapy coming to a Global South country near you
ft.com/content/1d2dcd…
Big Finance and Big Business wants us to 'trust the power of price signals'
https://twitter.com/DanielaGabor/status/1454021907486068737?s=20
we in Eastern Europe are familiar with the rhetoric of ‘get prices right and the market will deliver’.
We know it as shock therapy - and we remember the shock therapists.
economist.com/europe/1990/01…
We know it as shock therapy - and we remember the shock therapists.
economist.com/europe/1990/01…
shock therapists designed our transition from centrally planned economies as an explicit price and macrofinancial assault on state-owned companies.
structural transformation meant shrinking heavy industry sectors (sounds familiar?)
structural transformation meant shrinking heavy industry sectors (sounds familiar?)
shock therapists had a formidable institutional apparatus behind them -
the IMF and World Bank, very much in line with the neoliberal logic (known as Washington Consensus), pressured governments when these worried about social and economic upheaval of shock therapy
the IMF and World Bank, very much in line with the neoliberal logic (known as Washington Consensus), pressured governments when these worried about social and economic upheaval of shock therapy
if you look closely at #COP26 rhetoric, you can see carbon shock therapists coming.
institutional apparatus of carbon shock therapy is rapidly shaping to target middle-income and poor countries: instead of listening @KGeorgieva just transition rhetoric, check the details of @IMFNews Climate Strategy or Climate Change Dashboard
the institutional politics of shock therapy is also recreated: local central banks as allies to carbon shock therapists
even if central banks refuse to selectively increase cost of dirty credit, monetary austerity may be necessary to fight inflation from carbon pricing.
even if central banks refuse to selectively increase cost of dirty credit, monetary austerity may be necessary to fight inflation from carbon pricing.
#carbonshocktherapy is the 'real' side to 'financial' #WallStreetConsensus -
paradoxically, the derisking state will shield institutional investors but not local industries. Just transition for the few!
paradoxically, the derisking state will shield institutional investors but not local industries. Just transition for the few!
Carbon Shock Therapy is an ideological and political choice:
as @IsabellaMWeber has masterfully shown for China, there are different ways of answering the question
'how to introduce price signals for structural transformation'.
as @IsabellaMWeber has masterfully shown for China, there are different ways of answering the question
'how to introduce price signals for structural transformation'.
Carbon Shock Therapists are at their core fiscal fetishists, aghast at prospect of Big Green State strategically organising low-carbon transition, both through fiscal and monetary arm.
read our piece in conjunction with brilliant @cedric_durand piece that travels in the same direction
https://twitter.com/BJMbraun/status/1456659083948445700?s=20
and with @adam_tooze on ecological Leninism, which should be understood in comparison to carbon shock therapy.
https://twitter.com/DanielaGabor/status/1457251616696975362?s=20
critics of Big Green State dismiss it as wishful thinking 'technocratic' solution that ignores climate politics.
yes, you got to get politics behind, and then the technocrats in place, as Lenin once mused when thinking about transition to socialism.
yes, you got to get politics behind, and then the technocrats in place, as Lenin once mused when thinking about transition to socialism.
the macrofinance politics of #COP26, as we read them, are Carbon Shock Therapy because this is the financial capitalism status-quo solution.
as a child of the Romanian transition, I would not dismiss that, or Big Green State, as technocratic phantasies.
as a child of the Romanian transition, I would not dismiss that, or Big Green State, as technocratic phantasies.
stay tuned for a 12.000 words on the topic.
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