Why capitalism is so glorious (and why it will save the planet)


Actually, it's not quite capitalism that is glorious, it's that strange combination of calitalism and free (ish) markets that provides the glory. John Hempton, an Australian fund manager specialising in short selling of stocks, is trying to explain why he's short selling a company called First Solar. They're a great company, making a fortune, and they're doing so by making ever cheaper solar PV cells. Which is exactly what we want to be happening of course. However, there's one problem with their business model:

To make money in technology you need to do two things. Firstly you need to change the world (which First Solar clearly did) and secondly you need to keep the competition out. Alas very few businesses manage the second trick.

That problem being that other companies are deploying other technologies which are making solar cells even cheaper. Which is of course great for all of us consumers as the price is steadily getting closer and closer to that of the fossil fuel infrastructure.

Of course, when solar PV does reach that cost, or falls below it, then much of our concern about climate change (yes, I know, I'm out of step here in believing in its existence) simply goes away. We don't have to give up anything to reduce carbon emissions: we'll naturally be reducing such emissions as we all go for the cheapest technology, solar. I think this is great and of course my enjoyment is vastly increased by noting the annoyance it will cause to various Green types. I'm sure there are some of them who would rather see the seas rise and the oceans boil rather than accept that capitalism and markets were the solution rather than the enemy.

But the solution they will turn out to be.