Chichilnisky was the most brilliant economist of her generation. It is a scandal that she was bypassed for the Nobel. Gender, it seems, still matters in Econ because, frankly, the subject is retarded.



Having said this, I must admit this is a poor article. There is no connection whatsoever between the climate crisis- which would have arisen in acuter form under autarkic trade blocks- and a financial crisis which was a mere, wholly avoidable, blip. In the latter case, the problem was Arrow-Debreu securities which neglect Knightian Uncertainty. The Econ profession needs to switch to 'Hannan Consistent' or other 'regret minimizing' strategies because Knightian Uncertainty rises with technological progress. We are less sure now then ever before as regards what technology will dominate ten years down the line. Moreover, globalization means more scope for 'reswitching' type paradoxes and other 'holes in the decision space'.



It is very foolish to babble nonsense about Bretton Woods. Blame the Second World War by all means but don't point the finger at the only sensible way for the West to recover economically and face the Communist challenge.



Chichilnisky is from Argentina and must have met plenty of Chilean refugees. Thus she would be aware that Allende, like other fantasists from the 'Global South', was pursuing a crazy economic policy. Why speak of 'neoliberal economic policies' as opposed to basic common sense in a situation where the Chileans were pretending that they had a Star Trek type super-computer which could solve the Planning problem? It was the rapacity and ideological lunacy of bureaucrats and politicians which caused the Left to get marginalized- save where it could shoot 'dissidents' or Gulag them profitably.



Financial innovation based on Arrow-Debreu securities is not 'regret minimizing'. But incentive compatible mechanisms never come free of cost. Why are the authors pretending some wholly chrematistic carbon trading scheme can be costlessly implemented? Chichilnisky's own foundational work causes us to think that there is too much preference diversity for their to be a unitary market. At best there can be Tiebout sorting.



Why do neither of the authors refer to population expansion? Where demographic transition occurs, there is a growing constituency for 'clean air' and renewable energy sources.



Talk of the North-South divide is as foolish as attempting to revive Disco and flared trousers. The Brandt Commission wrote the epitaph for that type of silliness. The European ETS may disappear in a couple of years and so the Carbon market may fall off a cliff. Why? The fact is that sort of scheme is itself a Gordian knot. It prevents growth which in turn means more environmental degradation.



It may be that genuinely free markets can't do 'regret minimization'. Maybe China will show a different way forward. We certainly do have some tools and could easily get more but, I'm afraid, old fashioned Econ Theory is part of the problem, not part of the solution.