Climate Change, Free Markets and the Cold War Legacy

Excerpt from Merchants of Doubt: How a Handful of Scientists Obscured the Truth on Issues from Tobacco Smoke to Global Warming, by Naomi Oreskes and Erik Conway (Bloomsbury Press, 2010). Reprinted with permission from the authors.

From Conclusion: Of Free Speech and Free Markets

Market Fundamentalism and the Cold War Legacy

During the second half of the twentieth century, American foreign policy was dominated by the Cold War and American domestic politics was dominated by anti-Communism. Our protagonists—Fred Seitz, Fred Singer, Bill Nierenberg, and Robert Jastrow—were fiercely anti-Communist, and viewed science as crucial in helping to contain its spread.

In the early stages of their careers, they helped to build the weapons and rocketry programs that played a key role in American nuclear defense; in later years they used their positions of expertise and authority to defend the maintenance and expansion of the nuclear state, providing “scientific” credibility to arguments against detente and for continuous rearmament. As we saw in chapter 2, Jastrow, Nierenberg, and Seitz created the “scientific” pro-Star Wars lobby, which gave them tremendous credibility in hawkish conservative political circles.

When the Cold War ended, these men looked for a new great threat. They found it in environmentalism. Environmentalists, they implied, were “watermelons”: green on the outside, red on the inside. Each of the environmental threats we’ve discussed in this book was a market failure, a domain in which the free market had created serious “neighborhood” effects. But despite the friendly sound of this term, these effects were potentially deadly—and global in reach. To address them, governments would have to step in with regulations, in some cases very significant ones, to remedy the market failure. And this was precisely what these men most feared and loathed, for they viewed regulation as the slippery slope to Socialism, a form of creeping Communism.

Fred Singer gave his game away when he denied the reality of the ozone hole, suggesting that people involved in the issue “probably [have] … hidden agendas of their own—not just to ‘save the environment’ but to change our economic system … Some of these ‘coercive utopians’ are socialists, some are technology-hating Luddites; most have a great desire to regulate—on as large a scale as possible.”[33] He revealed a similar anxiety in his defense of secondhand smoke: “If we do not carefully delineate the government’s role in regulating [danger] . . . there is essentially no limit to how much government can ultimately control our lives.”[34] Today tobacco, tomorrow the Bill of Rights. Milton Friedman said much the same in Capitalism and Freedom: that economic freedom is as important as civic freedom, because if you lose one, it is only a matter of time before you lose the other.[35] And so one must defend free markets with the same vigor and vigilance as free speech, free religion, and free assembly.

The billionaire investor George Soros has coined a term to describe this perspective: “free market fundamentalism.” It is the belief not simply that free markets are the best way to run an economic system, but that free markets are the only way that will not ultimately destroy our other freedoms. “The doctrine of laissez-faire capitalism holds that the common good is best served by the uninhibited pursuit of self-interest,”[36] Soros wrote. Like its bête noire, Marxism, laissez-faire economics claimed to be scientific, based upon immutable laws of nature, and also like Marxism, it has not stood the test of experience. If it were a scientific theory, it would have long ago been rejected.[37] Free-market fundamentalism is an article of faith.

“Scientific Socialism” wasn’t scientific because when evidence suggested that some of its central claims might be wrong, its advocates refused to accept that; for the same reason, free market fundamentalism isn’t scientific, either. The basic tenet of laissez-faire, that “free and competitive markets bring supply and demand into equilibrium and thereby ensure the best allocation of resources,” is an axiom that turns out not to be true.[38] Prices can be displaced from their “equilibrium ideal” for long periods of time, as any American impacted by the ongoing housing market collapse can attest.

Even Milton Friedman acknowledged that there may be external costs that markets fail to account for—and pollution is the clearest example. Regulation is needed to address external costs, either by preventing them or by compensating those who are saddled with them.

Friedman was a true believer in the market—he thought that external costs were rarely high enough to justify government intervention. But most of us want our governments to protect us from harm in many, diverse ways. We want police and firefighters to protect our homes; we want to make sure that our food supply is not contaminated and the water that comes out of our tap is clean; we want to know that drugs we buy at the pharmacy won’t kill us. And in recent months, we’ve come to see the consequences of insufficient regulation of financial markets.

Moreover, the idea that free markets produce optimum allocation of resources depends on participants having perfect information. But one of several ironies of our story is that our protagonists did everything in their power to ensure that the American people did not have good (much less perfect) information on crucial issues. Our protagonists, while ostensibly defending free markets, distorted the marketplace of ideas in the service of political goals and commercial interests. The American belief in fairness and the importance of hearing “both sides” was used and abused by people who didn’t want to admit the truth about the impacts of industrial capitalism.

Free market fundamentalists can perhaps hold to their views because often they have very little direct experience in commerce or industry. The men in our story all made their careers in programs and institutions that were either directly created by the federal government or largely funded by it. Robert Jastrow spent the lion’s share of his career at the Goddard Institute for Space Studies—part of NASA. Frederick Seitz and Bill Nierenberg launched their careers in the atomic weapons programs, and expanded them at universities whose research activities were almost entirely funded by the federal government at taxpayer expense. Fred Singer worked directly for the government, first at the National Weather Satellite Service, later in the Department of Transportation. If government is bad and free markets are good, why did they not reject government support for their own research and professional positions and work in the private sector?

Many honest people who actually run businesses welcome reasonable government regulation with rules that prevent bad behavior—like unfair business practices or polluting the environment—so long as the rules are clear and fair, and create a stable, level playing field. After all, a corporation that invests in pollution control wants to know that it won’t suffer in the marketplace for doing the right thing.[39] But the most serious critique of the central tenet of free market fundamentalism is simply that it is wrong, factually.

History shows that markets do fail, sometimes spectacularly. During the Great Depression, capitalism was in crisis, and citizens of widely varying political and moral persuasions accepted the New Deal as necessary to save it. The alternative, it appeared to almost everyone, was a complete collapse that could indeed lead to Communism, or some other form of totalitarianism.[40] At the same time, the phrase “free enterprise” was invented and marketed by the business community, along with the notion of “the American Way,” to articulate the anxiety that something important might be lost if the New Deal went too far.[41] The exigencies of the Depression and World War II, however, made arguments for the “Iinvisible hand” seem quaint, and the New Deal concentrated power and authority in the federal government in a manner undreamed of by our Founding Fathers.

The Cold War revived these arguments—Soviet abuses of power became increasingly clear, even to former leftists—and they have driven American conservative ideology ever since. Ronald Reagan is credited with challenging the New Deal, with its presumptions of the necessity and beneficence of big government, but the ideals he instantiated had already been articulated by Friedman in 1962—the year of the Cuban Missile Crisis—the coldest moment of the Cold War. Indeed, Friedman later argued that Reagan’s positions were the same as Barry Goldwater’s; it had just taken twenty years for their wisdom to be recognized.[42] Bill Nierenberg agreed. On the occasion of the twenty-fifth anniversary of the University of California, San Diego, Roger Revelle was asked about Bill Nierenberg’s politics, and he replied that they were more than just conservative: “Bill Nierenberg . . . thinks the whole New Deal was a mistake, no kidding.”[43]

Since the Cold War was responsible for both the general resurgence of free market ideology in the United States and the specific professional success of the scientists in our story, it’s not entirely surprising that these men would demonize their latter-day agonists as enemies of freedom. As we’ve seen already, Robert Jastrow, Fred Singer, and Dixy Lee Ray—along with political propagandists such as George Will and Rush Limbaugh—routinely accused environmentalists (and sometimes scientists whose work contributes to environmental goals) of being Communists, Socialists, or fellow travelers. We noted earlier how George Will asserted that environmentalism was a “green tree with red roots.”[44] But he was hardly the only one.

When Dixy Lee Ray addressed the Progress Foundation Economic Conference in 1992 on the subject of “Global Warming and Other Environmental Myths,” she began by declaring, “I believe in freedom. I believe in liberty.” (As if climate scientists didn’t!) The story of the twentieth century was a progress tale, she explained, except that environmentalists insisted that progress must now stop. Sustainability was replacing progress as the leitmotif of the century, and this was a problem because liberty depended on progress.[45] Without economic progress there would be no economic growth, and without growth, governments would be forced to control resources. And to control resources, governments would have to control people.

The specter of expanded government control was often linked to the threat of global governance. This theme emerged strongly in the run-up to the Earth Summit at Rio, as Ray and others feared that a global treaty on climate change would decrease national sovereignty. They also feared that this would happen not of necessity, but by design. Ray concluded her speech to the Progress Foundation by frankly insisting that the agenda of the Earth Summit was Socialist, its objective to “bring about a change in the present system of independent nations . . . [a] World Government with central planning by the United Nations. Fear of environmental crises, whether such crises are real or contrived, is expected to lead to total compliance.”[46]

Ray recapitulated this argument in an interview with the Acton Institute for the Study of Religion and Liberty, whose opening question to her was this: “With the world-wide decline of socialism, many individuals think that the environmental movement may be the next great threat to freedom. Do you agree?” Ray replied, “Yes, I do . . . The International Socialist Party, which is intent upon continuing to press countries into socialism, is now headed up by people within the United Nations. They are the ones in the UN environmental program, and they were the ones sponsoring the so-called Earth Summit.” When asked, “Do you see a big influence by the radical environmentalists there?” again she replied, “0h yes. No question about that, the radicals are in charge.”[47] And who accompanied Ray to Rio? Fred Smith, the founder and head of the Competitive Enterprise Institute.[48]

Ray was not the only one to strike the theme that the Earth Summit was a Socialist front. Fred Singer similarly argued in the Wall Street Journal that the Earth Summit would “shackle the planet.”[49] Patrick Michaels argued that “we’re about to centrally plan the world’s energy economy based on the threat of global warming.”[50] Steve Milloy repeatedly attacked Consumer Reports for what one commentator has described as “socialism, sensationalism, and scaring consumers away from products.”[51] More recently, Patrick Michaels, a longtime critic of climate science and policy scholar at the Cato Institute, criticized plans for a cap and trade system to control greenhouse gases as “0bamunism.”[52]

Perhaps the best example of the thinking behind our story comes from Richard Darman, head of the Office of Management and Budget in the administration of George H. W. Bush. In 1990 Darman gave a speech in which he attacked environmentalists as having lost faith in America and accepting the inevitability of American decline. Darman’s bête noire, the New York Times reported, was green (perhaps they should have said vert), as he accused environmentalists of being closet Socialists: “Americans did not fight and win the wars of the 20th century to make the world safe for green vegetables.”[53]

All this had real impact. After George H. W. Bush signed the U.N. Framework Convention on Climate Change, formulated at Rio, the Republican Party turned against it and led the charge against its follow-up, the Kyoto Protocol, which would have put teeth into the general principles established at Rio. President Bush’s pledge to take concrete action to protect the planet had vanished along with his promise of no new taxes. The world would not be made safe for green vegetables. It would not even be safe for polar bears. Or people living on Pacific Islands.

Political scientist Peter Jacques, with sociologist colleagues Riley Dunlap and Mark Freeman, has shown that books skeptical of the reality of environmental issues increased fivefold in the 1990s over the preceding decade (even as the scientific consensus about them was coalescing), and the Republican turn against environmentalism occurred even as popular support for U.S. environmentalism was rising.[54] This observation brings us back to the early stages of our story and the debate over SDI and nuclear winter.

With the collapse of the Soviet Union, Cold Warriors looked for another great threat. They found it in environmentalism, which just at that very moment had identified a crucial global issue that required global response. In the early 1990s, global warming changed from a prediction about the future to a fact about the present. Global warming became the most charged of all environmental debates, because it is global, and it implicates everything and everyone. If the rules of economic activity are the central concern of contemporary conservatives, then global warming has to be central, too, because it stems from how we produce and use energy, and energy is involved in all economic activity. Nicholas Stem, formerly chief economist and senior vice president of the World Bank from 2000 to 2003, and principal author of the Stern Review of the Economics of Climate Change (commissioned by U.K. prime minister Gordon Brown), has called climate change “the greatest and widest-ranging market failure ever seen.”[55] No wonder the defenders of free market capitalism are worried.

The “reds dressed in green” refrain continues today. In December 2009, as world leaders tried yet again to craft an agreement to control greenhouse gases—seventeen years after the U.N. Framework Convention on Climate Change committed them to do just that—Charles Krauthammer declaimed in the Washington Post that environmentalism was socialism by other means, a brazen attempt to transfer wealth from rich to poor. “With socialism dead, the gigantic heist is now proposed as a sacred service of the newest religion: environmentalism . . . the Left was adrift until it struck upon a brilliant gambit: metamorphosis from red to green.” Whether an agreement was achieved in Copenhagen or not, Krauthammer went on, Americans needed to beware of the enemy within: the EPA. “Since we operate an overwhelmingly carbon-based economy, the EPA will [soon] be regulating practically everything. . . Not since the creation of the Internal Revenue Service has a federal agency been given more intrusive power over every aspect of economic life. . . Big Brother isn’t lurking in CIA cloak. He’s knocking on your door, smiling under an EPA cap.”[56]

Some environmentalists no doubt are Socialists, but in our experience very few climate scientists are. Moreover, even if all environmentalists were socialists, it does not follow that global warming is a myth. One can believe in the superiority of the capitalist system and advocate for market-based solutions to pollution—as many people do—but it does not follow that one should doubt the science that demonstrates the need for such solutions. Acid rain, secondhand smoke, the destruction of stratospheric ozone, and global warming are all real problems; the real question is how to address them. Denying their truth does not make them go away. On the contrary, the longer we delay, the worse these problems get, increasing the odds that governments will have to take the draconian actions that conservatives most fear.

Which leads to the second great irony of our story. Men like Bill Nierenberg were proud of the role they had played in defending liberty during the Cold War and understood their latter-day activities as an extension of that role. They feared that overreaction to environmental problems would provide the justification for heavy-handed government intervention in the marketplace and intrusion in our personal lives. That was not an unreasonable anxiety, but by denying the scientific evidence—and contributing to a strategy of delay—these men helped to create the very situation they most dreaded.

Consider the case of Gus Speth.

We met Gus Speth in chapter 3 as a member of President Jimmy Carter’s Council on Environmental Quality, and an advocate for action against acid rain. Speth is no rock-throwing radical. Born in South Carolina, he is the consummate Southern gentleman: well-spoken, well educated, well regarded. As an undergraduate he attended Yale, went to Oxford as a Rhodes Scholar, and returned to Yale for law school. During his long career he taught at Yale and Georgetown, served as an advisor to President Carter, worked for the United Nations, and in 1999 returned to Yale once again as the dean of the School of Forestry and Environmental Studies. Time magazine once called him the “ultimate insider.”[57]

But after forty years as an “inside” environmentalist, Speth has become radicalized by the world’s failure to act on problems we have known about for a long time. He now concludes that radical change is needed. “The global economy is crashing against the Earth,” he warns in his recent book, The Bridge at the Edge of the World. Environmental deterioration is driven by economic activity, so we must consider if there is a fundamental flaw in our economic system. His conclusion “after much searching and considerable reluctance, is that most environmental deterioration is a result of systemic failures of the capitalism that we have today and that long-term solutions must seek transformative change in the key features of this contemporary capitalism.”[58]

The merchants of doubt have produced just the effect they most dreaded. Southern gentlemen are now preparing to dismantle capitalism.


[33] Glantz et al., The Cigarette Papers, chap. 4; Brandt, The Cigarette Century, 247-48, 275-76 , 364, 379.
[34] George D. Snell, “Clarence Cook Little,” Biographical Memoirs v. 46 (Washington, D.C.: National Academies Press, 1974), 240-63, Little ran the Tobacco Industry Research Committee from 1954 to 1969.
[35] Waxman Report, How the Tobacco Industry Launched Its Disinformation Campaign, 7.
[36] Mark Parascandola, “Public Health Then and Now: Cigarettes and the US Public Health Service in the 1950s,” American Journal of Public Health 91, no. 2 (February 2001): 196-205, on p. 198.
[37] Tobacco Institute Research Council, A Scientific Perspective on the Cigarette Controversy, 1954, BN: 946078469, Legacy Tobacco Documents Library.
[38] Hill and Knowlton, “Public Relations Report to the Tobacco Industry Research Committee,” 14 February 1956, exhibit 13, BN: TINY000I852, Legacy Tobacco Documents Library.
[39] Hill and Knowlton, “Preliminary Recommendations for Cigarette Manufacturers,” December 24,1953, Exhibit 3, on pp. 5-6,
, BN: TINY000I775, Legacy Tobacco Documents Library, quotes on pp. 5-6.
[40] Hill and Knowlton, “Preliminary Recommendations,” 5-6.
[41] Stanton A. Glantz et al., “Tobacco Industry Sociological Programs to Influence Public Beliefs About Smoking,” Social Sciences and Medicine 66, no. 4 (February 2008): 970-81.
[42] David A. Kessler, A Question of Intent: A Great American Battle with a Deadly Industry (New York: Public Affairs, 2002); Brandt, The Cigarette Century; Rampton and Stauber, Trust Us, We’re Experts!; Thomas O. McGarity and Wendy Wagner, Bending Science: How Special Interests Corrupt Public Health Research (Cambridge, Mass.: Harvard University Press, 2008).
[43] Museum of Broadcast Communications, “Fairness Doctrine: U.S. Broadcasting Policy,”………./fairnessdoct.htm.
[44] Leonard M. Schuman, “The Origins of the Report of the Advisory Committee on Smoking and Health to the Surgeon General,” Journal of Public Health Policy 2, no. I (March 1981): 19-27; Brandt, The Cigarette Century; Glantz et al., The Cigarette Papers.
[45] Waxman Report, How the Tobacco Industry Launched Its Disinformation Campaign, 7, 1994, 79.
[46] David Halberstam, The Powers That Be (Urbana-Champaign: University of Illinois Press, 2000), 38.
[47] Hill and Knowlton, “Report on TIRC Booklet ‘A Scientific Perspective on the Cigarette Controversy,'” May 3, 1954, Exhibit 6, on p. I, BN: TINY0001792, Legacy Tobacco Documents Library.
[48] Tobacco Industry Research Committee: Council for Tobacco Research, BN: 2015002362, Legacy Tobacco Documents Library.
[49] Ibid.
[50] Tobacco Industry Research Committee, BN: 2015002362, Legacy Tobacco Documents Library.
[51] Ibid.; on the origins of the 1964 committee see Schuman, “Origins of the Report.”
[52] Schuman, “Origins of the Report,” 19-27.
[53] Stanton Glantz notes that the industry was terrified of what health groups would do with the report, but these groups did not respond as strongly as the industry expected. See Glantz et al., The Cigarette Papers, 50-52.
[54] Brandt, The Cigarette Century, 220, 228-30.
[55] Parascandola, “Public Health Then and Now,” 196-205.
[56] Mark Parascandola, “Two Approaches to Etiology: The Debate over Smoking and Lung Cancer in the 1950s,” Endeavour 28, no. 2 (June 2008): 81-86, on p. 85.
[57] Dean F. Davies, “A Statement on Lung Cancer,” CA: A Cancer Journal for Clinicians 9, no. 6 (1959): 20 7-8.
[58] Glantz et al., The Cigarette Papers, 15, 32; also see Kessler, A Question of Intent, for a discussion of his efforts to regulate nicotine as a drug, and industry opposition in the 1990s.

Excerpted from Merchants of Doubt by Naomi Oreskes and Erik Conway. Copyright © Naomi Oreskes and Erik Conway, 2010. All rights reserved.

Naomi Oreskes is one of the world’s leading historians of science. Professor of History and Science Studies at the University of California, San Diego, and Adjunct Professor of Geosciences at the Scripps Institution of Oceanography, her research focuses on consensus and dissent in science. She has won numerous prizes for her work, and has lectured widely in diverse venues ranging from the Madison, Wisconsin, Civics Club to the U.S. Air Force Research Laboratory.

Erik Conway is a historian of science and technology residing in Pasadena, CA. He is currently employed by the California Institute of Technology. He studies and documents the history of space exploration, and examines the intersections of space science, Earth science, and technological change.

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