When the market economy and public well-being clash

By: - February 1, 2022 5:59 am

Image: Adobe Stock

Cryptomining Image: Adobe Stock

Controversial Greenville facility proposal provides latest reminder that what’s good for business is not always good for society

There’s no doubt that when it comes to the generation of wealth and innovation, the market economy is one of the great inventions of modern human history. Legitimate arguments can and must be had about how much longer humans can keep up the pace of economic growth to which they’ve become accustomed; as Duke University scholar Dirk Phillipsen points out, it’s literally impossible for economic growth to continue its exponential ascent. But it’s also true that, right now for billions of humans, life is longer and easier than ever before and that this is thanks in large part to the market.

As even a moment’s honest reflection reveals, however, the market economy is, like all other human creations, far from perfect. While the pursuit of efficiency, wealth and self-interest can be enormously powerful forces for good, they can also cause enormous harm.

At the dawn of the last century, it took Progressive Movement activists and advocates decades to dramatically curb (at least in the U.S.) the market’s longstanding and natural affinity for cheap child labor and voracious monopolies.

Similarly, as authors Donald Cohen and Allen Mikalien point out in their new book, “The Privatization of Everything” (click here to watch last week’s Policy Watch Crucial Conversation with Cohen), one can also see this conflict between market “efficiency” and the common good at work in dozens of modern examples in which public functions have been turned over to private business.

Cohen and Mikalien make clear that private profit and the public good are frequently at odds: Private prison companies lobby against criminal justice reform. Private weather reporting firms fight to prevent the National Weather Service from making public safety information more accessible. After selling its parking meters to a giant conglomerate, the City of Chicago was forced to pay the company a penalty in order to put in bike lanes.

One of the seminal conflicts in modern human society is between the market and the health and sustainability of our natural environment. From coal mining firms bulldozing mountain tops, to trash haulers with organized-crime connections making toxic waste “disappear,” to the countless ways in which our reliance on highly profitable fossil fuels drives the global climate emergency, the search for short-term profit is something that must often be reined in to protect the common good.

For a classic recent example, be sure to check out NC Policy Watch environmental reporter Lisa Sorg’s Jan. 28 news story about the Greenville City Council’s recent highly questionable decision to approve the construction of a giant “cryptomining” facility in an undisclosed part of the town.

As Sorg explains, cryptomining is a rather mysterious business (at least to the average person) that uses networks of high-powered computers to “verify” cryptocurrency — an alternative form of money like Bitcoin and Ethereum.

What’s perhaps most notable about these facilities, however, is that the giant computer banks they employ are truly massive electricity users and contributors to carbon pollution and climate change.

The Greenville proposal from a Minnesota company called Compute North anticipates a need for 150 megawatts of electricity – that’s enough to power nearly 25,000 homes. This, even though the facility will create employment for just 15 people.

In fact, it’s been estimated that cryptomining – a business that’s only been around for a few years – already consumes a remarkable 0.6% of all the electricity generated on planet Earth.

With such stunning and troubling statistics, the many sketchy ends to which cryptocurrency is often put (its anonymity makes it ideal for money laundering and human trafficking) and its frequent wild volatility, it’s very hard not see this as a classic example in which the search for profits and wealth conflicts with the common good. Sen. Elizabeth Warren, to her credit, has been raising this very issue of late.

This is not to say that the idea of cryptocurrency is inherently and utterly without redeeming aspects. While one might wish that its tech savvy developers and “miners” would devote their formidable brain and computing power to addressing vexing real world problems like, say, our dying oceans or the search for truly sustainable energy, one can appreciate the appeal of a currency that’s not controlled by any particular government and that is based in large part on the shared oversight and auditing that’s provided by millions of internet users across the globe. And, of course, one can understand the profit motive that drives businesses like Compute North to make money off a business that remains, at this point, legal in the U.S.

Ultimately, however, just because something can work in the market doesn’t mean it should. Less than 160 years ago – the span of just two lifetimes – the “genius” of the market provided for the legal and highly profitable trade in human beings in this country until democratic institutions imposed rules proscribing it. For the good of the planet, cryptomining seems like a likely candidate for similar public regulation.

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Rob Schofield
Rob Schofield

NC Newsline Editor Rob Schofield oversees day-to-day newsroom operations, authors regular commentaries, and hosts a weekly radio show/podcast.