The latest report by the International Panel on Climate Change (IPCC) estimates that hundreds of billions of dollars will be required for climate mitigation and adaptation investments per year to avoid catastrophic global warming. Yet, some of our financial practices are not only slow to adapt to this requirement, but actually represent an obstacle in achieving the goal.
John Kenneth Galbraith, in his classic The Affluent Society (1952) formulated a powerful argument he called the “dependence effect.” In a nutshell, the idea is that capitalist societies create wants in individuals in order to then satisfy them. Perhaps the central tool in this process is advertising. Galbraith suggested that the additional wants generated through advertising might not even lead to additional welfare. People’s level of preference satisfaction before being exposed to advertising can be just as high as after the exposure. Viewed from his angle, advertising is wasteful from a societal perspective, because the costs involved do not generate any tangible benefits. The reason firms engage in it is solely to secure more market share than their competitors. (more…)
The Paris Agreement on Climate Change has been heralded as ‘a monumental success for the planet and its people.’ [1] However, others have also already expressed strong criticism. It remains up to the future to decide on the success or failure of the agreement. This post contains some reflections about this future, and I hope that the topicality of the issue justifies its length and unscheduled publication. (more…)
