The National Post is reporting that the economic fallout of the BP oil spill will be minimal. Any reduction in GDP along America’s Gulf Coast resulting from oil shortages will be offset by the increased local spending associated with cleanup efforts. They go as far as to say that:
the economic fallout from the disaster is likely to relatively benign to the global recovery and may even end up benefiting Canada’s resource-rich economy, economists say.
The failure of thought here is obvious – a distinction is being drawn not only between monetizable and non-monetizable costs (in fact, the environmental cost can be monetized), but between those costs immediately felt by capitalism, and those which have no immediate bearing on shareholder value. This is the same failure of Capitalism to respond to environmental crisis as prevents adaptation to respond to the threat of dangerous global warming.
What we should take from this is the failure of capitalism to be adaptive, to respond to incentives, to anticipate profitable futures. Rather, in its current structures it responds only, or at least principally, to short term incentives and ignores as best it can long term disaster. Capitalism, therefore, is a weak system – a system which is not for us adequate to the challenges posed by the fore-knowledge of long term environmental crises. It must be tamed (i.e. more highly regulated), or eliminated, if we desire to not go under as a result of environmental crises.