Show your resource and seize the green

Did you know it is a capitalist's duty to be green? Let’s not leave it to the socialists

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If we really are squeezing the earth, shouldn't capitalists take charge?
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Simon Miller
On 13 July 2012 14:11

Tell me something, when you hear about resource scarcity, what do you think? Let me guess: here we go, a bunch of tree huggers about to tax me to high heaven for some dubious principle of anthropomorphic global warming that probably doesn't exist; I mean have you seen the weather out there? 

What if I said to you that it is one of the most fundamental battles that capitalism is about to face apart from a banking system that is determining to shoot itself in the head and take everyone out with it?

Think about it. What produces cost in capitalism? Supply and demand. What happens when the supply is short and the demand is high? The price goes up. 

Whether you believe in AGW or not there is one thing that we should agree on and that is that with an ever growing global population, resources come under increasing pressure be it food, energy or space.

I'm writing this in Oxford at the ReSource2012 conference where businessmen, politicians and bankers are talking about if there is a business case for resource-management. 

Now, don't worry, I haven't become a tree-hugger. But for me, I think there is a very powerful argument for capitalists to seize resource management  from the yoghurt weavers and marxists and create its own standpoint that is good for business and good for the resources of the world. 

After all why should they have all the arguments? 

Take the lovely weather we are having in the UK at the moment. With the weather still deciding that the tennis is still on, the harvest yields this year are expected to be poor. 

What does this mean for you? Well, less crop yields means that eventually you will be paying more for your cornflakes and, because of feed, your Sunday roast and milk. 

Now, of course, food companies and producers generally take positions to offset poor yields in the form of derivatives but the question of supply still remains. Add to that the growing appetite for meat in China - half of all pork consumed is in China - the demand for feed increases that way as well, putting further pressures on costs. 

What about other staples such as water? Well think of all those burst pipes - who pays for that loss? You do. You leave a tap running, you pay the cost. 

And there's energy. Like tax, energy policy seems to have been kidnapped by emotive straw dog arguments based on jealousy and mis-guided principle instead of asking the simple matter of, does it work?

Fundamentally wind production fails this question. Too big, too ugly and doesn't work. Costs too much money, too unpredictable and even eats energy because it has to be turned by regular energy sources when there is no wind. 

Wave power has potential. We know the tides, we know that, in principle, the snake-design works in an efficient manner and we have plenty of sea - especially after our fish stocks are wiped out by the EU. 

Nuclear? Expensive and potentially dangerous but we know it works. The problem is that after the events in Japan, is there the political will in the country to build them, and more importantly get it done at market, rather than state, prices?

So we have coal, gas and oil. 

As prices go up, fields that were inaccessible become viable - take the Falkands for instance. 

And the same goes for shale gas. 

But this is still about the resource sourcing rather than resource management and this is where capitalism comes in. 

We've all heard the order to wear the hair shirt with energy taxes and flight taxes so that only the rich can fly to their Tuscan villas. But I have had enough of this Marxism – this leftie control of our lives. It doesn't matter whether you believe in AGW or not, the argument should be about resources.

If the outcome helps those that believe in AGW then so much the better as perhaps they would then shut up...or more likely they'd find a new religion to have a go at us with. 

So here's an idea for the governments of the world. Instead of taxing companies to high heaven, instead of regulating them into asphyxiation, give companies their necks.

Because I’ll tell you what - if it is economically more sensible for a company to be efficient, to create effect products, to develop better food production, it will. If customers are ditching your cars because of the price of petrol, you will create a better car with more MPG. Computers get better batteries, more efficient processing power, and so on. 

In a true capitalist system, companies survive on competition and customers. This self-flagellation of taxes and rationing will, in the end, be fruitless. Why? Because it is in the hands of governments who do not understand one thing about the human condition. Companies do. Capitalists do. They have to in order to survive.

Left to governments and their subsidy junkies, gorged on state funding, resources will get scarcer, prices will continue to go up and nothing will change.

When companies are allowed to strive in a competitive environment you tend to find that innovation quickly follows and the reverse - and quite often with the costs going up - happens when governments open up your wallet.

Governments are the essence of waste in time, money and resources. It is time the capitalists joined the argument about resource scarcity, and it is about time capitalist come up with the solutions, because God help us if we leave it to the politicians and tree huggers.

Simon Miller is the Editor of Financial Risks Today. He tweets at @simontm71

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