Supreme Court climate decision backs capitalism without conscience

Several political commentators have speculated recently that neoliberalism is dead. It’s not. That arguably soulless economic philosophy is evident in the new U.S. Supreme Court ruling that disarmed the federal government’s best weapon against global climate change. The court ruled that without specific direction from Congress, the Environmental Protection Agency (EPA) can’t regulate greenhouse gas pollution under the Clean Air Act.

Neoliberalism is a confusing term in the United States because we associate “liberal” with the political left. But in Europe, where modern neoliberalism was born shortly after World War II, the term refers to the philosophy that free-market competition, not government, should organize society. Neoliberals believe the government’s only functions should be national defense and keeping markets unfettered.

To a neoliberal, corporate social responsibility is superfluous because a corporation’s only responsibility is to generate profits for its shareholders. It’s a winner-take-all, capitalism without conscience and wealth without obligation ideology.

Influential capitalists in Europe revived neoliberalism after the Great Depression, worried that the success of Franklin Roosevelt’s New Deal would lead to socialism and even communism. The philosophy took root in the United States near the beginning of the 1980s, championed by President Ronald Reagan, who became the patron saint of conservatives when he said, “Government is not a solution to our problem; government is the problem.”

As CUNY social policy professor Mimi Abramovitz sums up, “For the last 40 years, our top leaders convinced the American public that government is too big and very, very bad. They sealed the small-government deal with endless tax cuts, spending cuts and privatization of the public sector.”

However, one doesn’t have to be a socialist or communist to appreciate the value of government. It can reach too far into our lives if we’re not careful, but it protects us from the law of the jungle. Neoliberalism’s results are evident today:

• 37 million Americans lived in poverty and nearly 30 million had no health insurance in 2020
• In just two years, wage increases for wealthy Americans have been 10 times larger than for the half of Americans at the bottom of the income scale
• America’s widening wealth gap costs the economy more than $300 billion per year
• The United States ranks only 28th in social progress among nations, a 12-place drop since 2014, more than any other country in the world
• More than 137 million Americans, 40 percent of us, still breathe unhealthy air
• The U.S. remains the world’s second-highest source of the pollution responsible for global climate change
• 26 other countries are less corrupt than the U.S.
• An international study concludes democracy is flawed and losing ground in the United States

The free-market myth

Neoliberalism’s view of the world is fundamentally flawed because free markets don’t exist and probably never will. In a well-functioning marketplace, the prices we pay for products would reflect their actual costs to society. Instead, prices are distorted by government taxes, subsidies and policies, including many that conservatives support. For example, Congress has provided the oil industry with tax breaks for over a century. Today, fossil fuels receive more than $20 billion annually in government subsidies.

However, tax subsidies are small compared to the American people’s involuntary support of fossil fuels, including economic recessions, unstable prices, weather disasters and the health impacts of air pollution. The social and environmental costs of oil, coal and natural gas amount to $650 billion annually in the U.S. and nearly $6 trillion globally, according to the International Monetary Fund. Consumer prices don’t reflect these costs, either. The closest Congress has come to mobilizing market forces against those damages — a cap-and-trade regime for carbon dioxide emissions — was approved by the House but killed in the Senate in 2010, proving again that the “world’s greatest deliberative body” is where good ideas go to die.

Defacto deregulation

Without Congress’s cooperation, the only option left to control climate-changing pollution was the Obama administration’s “Clean Power Plan,” where the Environmental Protection Agency (EPA) would use the Clean Air Act to regulate carbon emissions from power plants. But the Supreme Court now says EPA does not have the authority unless Congress adds specific greenhouse gases to the act’s list of dangerous air pollutants.

Because Congress often gives agencies discretion in administering new laws, the Supreme Court’s decision opens the door to lawsuits against all kinds of regulations where federal agencies extend their oversight to problems lawmakers couldn’t anticipate. For example, Congress did not list greenhouse gases in the Clean Air Act because it was unaware of how serious climate change was when it passed the Act in 1970. It was not until several years later that EPA determined the gases endanger the public health and welfare, the criteria specified in the act.

The court’s conservative majority knows Congress is gridlocked by partisanship. Although neoliberals aren’t the majority in Congress, they can and will block any attempt to modernize federal regulations.

Neoliberalism won another victory 12 years ago when the Supreme Court’s conservative majority ruled that corporations and wealthy individuals can give unlimited amounts of money to election campaigns. That gives corporations more power to buy influence in Congress to tilt “free markets” in their favor.

With the midterm elections approaching, critics are blaming President Biden and Democrats for getting too little done. But Biden has introduced, and House Democrats have passed bills to reform campaign finance, confront climate change and address pressing social problems. Republican filibusters in the Senate killed each of the bills. Now the conservative court is blocking the Biden administration from protecting Americans against the most dangerous environmental threat of all time.

So, rumors of neoliberalism’s demise are greatly exaggerated. Greed still rules. The problem is not that voters gave Democrats control of Congress. The problem is that voters elected too few of them.

William S. Becker is a former U.S. Department of Energy central regional director who administered energy efficiency and renewable energy technologies programs, and he also served as special assistant to the department’s assistant secretary of energy efficiency and renewable energy. Becker is also executive director of the Presidential Climate Action Project, a nonpartisan initiative founded in 2007 that works with national thought leaders to develop recommendations for the White House as well as House and Senate committees on climate and energy policies. The project is not affiliated with the White House.