Banks’ climate pledges would downgrade unrealized businesses to second tier economy
Businesses seeking financing may soon face a host of requirements that will, in fact, determine whether they are “awake” enough to be approved by financial institutions for loans or investments.
If the demands are presented as goodwill towards the oppressed and the environment, they are underpinned by an ideology with totalitarian tendencies, according to several experts in totalitarianism and the market economy.
The agenda is driven by many of the biggest names in finance, including big banks, investment houses and wealth managers.
If successful, the financial institutions’ agenda would create a two-tier economy, with the “awakened” class to receive preferential treatment and dissidents relegated to picking up the leftovers, experts said.
“Woke” in this sense refers to a set of progressive views that have dominated establishment circles in government, academia, and business.
Companies promise to give preferential treatment to customers who run their operations in a “sustainable” way. This means that customers will need to implement policies that banks believe reduce carbon emissions or promote a number of other goals, such as “gender equality” and “racial equity”. Customers who do not support carbon reductions should face penalties such as “exclusion” and “divestment,” according to the guidelines of the United Nations-backed Net-Zero Banking Alliance, which has dozens of major banks among its members.
Many scientists predict that unless carbon emissions are drastically reduced, the planet will heat up and experience more severe natural disasters, such as floods and droughts. Other scientists question these catastrophic climate predictions, which hold bad record to become reality.
But the implications of the climate agenda that have raised concerns have little to do with the effects of global warming.
Pragmatically, the financiers’ agenda aligns with the policies of the Biden administration, giving them the opportunity to capture some of the hundreds of billions of taxpayer dollars it promises to fund. At the same time, they can try to influence the establishment of the regulatory framework, ensuring that it benefits them rather than new entrants.
After all, bank executives have a fiduciary duty to bring profits to shareholders, even if the profits are supported by government intervention, said Peter Klein, professor of entrepreneurship at Baylor University and researcher at the Mises libertarian institute.
“If they can do it by taking advantage of the regulatory system, by taking advantage of the legal system… why wouldn’t they do it?” he told The Epoch Times.
Some experts have warned that if the investment push fails, it could end in a colossal bailout – another transfer of wealth from taxpayers to corporations.
Yet such a program presents even more fundamental risks because it requires adherence to an ideology that is, in essence, totalitarian, academics stressed.
Advocates of freedom generally warn of the government’s attempts at central planning. But “it’s not just government officials who have the planner mindset,” Klein stressed. “It can often be senior executives as well.”
“In government, but of course also in the private sector, you have a sort of cadre of elite decision-makers who consider themselves better placed to make important decisions than other market players,” he said.
In fact, economist Friedrich Hayek predicted that it would be the monopoly corporations that would first take on the task of planning the economy under growing opposition to free market competition.
“The universal fight against competition promises to produce something even worse in many ways in the first place. A state of affairs which cannot satisfy neither the planners nor [free market] liberals, a kind of union or corporate organization of industry in which competition is more or less suppressed, but planning is left in the hands of independent monopolies of separate industries, ”he wrote in his 1943 book“ The Road to Serfdom ”.
“This is the first inevitable result of a situation in which the people are united in their hostility to competition, but do not agree on anything else. By destroying competition industry after industry, this policy places the consumer at the mercy of the joint monopoly action of capitalists and workers in their most organized industries.
“Once this stage is reached, the only alternative to a return to competition is state control of monopolies. A control which, to be made effective, must become progressively more complete and more detailed.
This is an “apt description of the current state of the economy,” according to Michael Rectenwald, a retired professor of liberal studies at New York University and an authority on corporate socialism, a convergence of government and business interests in establishing a form of totalitarian and socialist regime. .
“Note that this consortium of banks and asset management companies, the largest in the world, aims” to stimulate private financing of clean technologies and to put pressure on polluting industries that use their services to reduce emissions. ” In other words, they will use their financial power to oust non-compliant producers by directing investments to preferred reset partners, ”he said in an email. in reference to the “Great Reset” towards “a fairer and greener future” proposed by the World Economic Forum (WEF) and its leader, Klaus Schwab.
“This financial stranglehold on industries will consolidate the economic status of advantaged producers and strengthen their monopolization over production and distribution,” Rectenwald said. “The measures will also affect the consumption of end users, whose carbon emissions will be reduced by default. They will have no say in the operation of gasoline vehicles, as these vehicles will no longer be produced and gasoline will no longer be available. The aim is to reduce the mobility and consumption of the vast majority and reduce them to the rank of captives on the agenda of the Big Reset. “
While financiers may not be able to completely eliminate non-compliant companies, “planners are creating a two tier system, with preferred producers / distributors at the top and unawakened producers / distributors below”, did he declare.
“This is a static hierarchy and will lead to stagnation and possibly the need for the state to intervene even more than it already does,” he said. “Interestingly, it is the socialists who, in their contempt for competition, help and encourage the formation of monopolies and a static economic hierarchy. The elimination of a thriving middle class is always the way of serfdom. “
Klein acknowledged that what we are seeing now is “not exactly 1940s style industrial planning.”
“But it’s in the same spirit,” he said.
Despite complaints about crony capitalism today, “the big reset, social responsibility and stakeholder models [currently advocated by many large corporations] let’s run the risk of bringing us even more cronyism than we have now, ”he said.
Argument from freedom
The argument that it is better, necessary or even inevitable to consciously run the economy is not new. It has been particularly important over the past 100 years and generally promoted by socialists from different walks of life.
“There has always been a feeling among certain segments[s] of society that the unforeseen seems primitive, seems wild and crazy, ”Klein said.
This notion dates back at least to Karl Marx, co-author of the Communist Manifesto, who described socialism as “the socialized man, the associated producers, rationally regulating their exchange with Nature, putting it under their common control, instead of” to be ruled by it. as by the blind forces of nature ”, in his Das Kapital.
Yet the notion stems from a misunderstanding of the free market pricing system, Klein said.
“Proponents of central planning… argue that proponents of some market-based systems assume that each individual is very knowledgeable and forward-looking and will always make the right decision and so on. This is not the argument at all. The argument is that there is a great deal of uncertainty about what to do, ”he said.
The premise of the knowledge distributed by free market scholars is that among the myriad of decisions individuals make, at least some of them will be right. The solution that actually works will attract the attention of other market players, allowing the economy to adapt.
“You want a system where a lot of different people can try a lot of different things, everyone is motivated to use their knowledge to the best of their ability because they personally reap the benefits and bear the costs of the actions they take,” ” he said.
Pushing economic decision-making down to the smallest unit of an individual or family also limits the negative impact of any bad choices.
“A decentralized market system limits the damage that mistakes can impose, while in a centralized system, small mistakes can have huge detrimental effects,” Klein explained.
Posing climate change as a crisis that warrants economic intervention is not grace enough, according to James Taylor, president of the Heartland Institute, a free market think tank skeptical of catastrophic climate predictions.
At the very least, he said, it should be voted on, not pushed from the top.
“Firmly believing that something bad is going to happen does not justify overturning the democratic process, does not justify taking away people’s rights without at least giving people the right to defend them through a democratic political process,” he told The Epoch Times.
The institution of a society itself is the product of the government which grants “certain advantages and protections” to these entities, he argued.
“If they were just creatures of the economy, then I would agree… that we should leave them alone.” But again these are created with the help of government power and now they are being used to impose political agendas on American citizens. It’s very disturbing, ”he said, noting that“ this is the very kind of inexplicable authoritarianism the left was always concerned about ”.
Environmental efforts don’t necessarily have to conflict with prosperity, according to Taylor.
It is precisely its prosperity that has enabled America to develop new, cleaner technologies that have helped cut air and water pollution by more than half over the past 40 years, he said. he noted.
“When you have a rich economy, you can afford to adopt policies that are very beneficial for the environment,” he said.