Collision Course: Endless Growth on a Finite Planet (12 page)

Forrester and his coauthors located resources and prices within a long-term process occurring in a geophysical context; they assumed the ultimately finite character of resources, and focused on the gradual increase in the level of difficulty of extraction: “Greater effort in men, capital and management as stocks are depleted, mines become deeper, oil fields shrink and become harder to find, [and] more waste material must be handled.” This is not a concern with relative scarcity, amenable to substitution and reallocation by price adjustment; they are talking about absolute scarcity.
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As noted previously, neoclassical economists do not acknowledge any absolute scarcity, and even if not all are quite so “cornucopian” as the pro-growth economist Julian Simon, all are convinced that price solves shortage and that the market will manifest solutions. In Forrester’s universe, price rises “do not insulate users from shortage … [but merely] impose the consequences of shortage.” Forrester and colleagues cited an eminent economist and reserve bank governor, Henry Wallich, who warned against blind faith in the price system, which, he thought, might not be timely in responding to the threat of actual resource scarcities (see box 6.2).
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Forrester and the
Limits
researchers who amplified his model embraced the assumption that it is essential to include the biophysical basis of the human economy if any reasonably accurate account of its longer-term future is to be delivered. They were perfectly open about this. They aimed to integrate economics and natural systems. They assumed that resources are not infinite. Many of the criticisms of economists arose from their assumption that economics is not part of a larger system and ecological factors are not necessary or relevant to economic models (unless environmental issues are under specific investigation).
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Criticism by Denial

Beckerman and many other economists denied the existence of any serious problem of any kind at all. These men claimed that technological progress always provides new resources—which must therefore be regarded as infinite—and denied that there is any connection between production and pollution.

Carl Kaysen, then at Harvard, expressed his technological confidence in a nutshell: “it can be shown that the finiteness of the earth does not in itself set limits to what technology might accomplish.” Kaysen asserted that, owing to technological advance, limits “are no longer fixed, but grow exponentially.” He went on to claim that Robert Socolow had calculated that the earth’s “available matter and energy … could support a population at least 1,000 times the present one at the current US per capita income level.” The world’s population at that time was just over 3.5 billion, so Kaysen was referring to something like 3.5 trillion people in fairly advanced stages of consumption.
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Beckerman argued that “even though it may be impossible at present to mine to a depth of one mile at every point in the Earth’s crust, by the time we reach 100m AD [the year 100 million] I am sure we will think up something”; he also quoted with approval Neil Jacoby’s contention that “there are no foreseeable limits to supplies of basic natural resources including energy at approximately current levels of cost.”
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These claims emerged as articles of faith, often repeated since, with evidence rarely cited. Crucially, as the quotation from Socolow reflects, they treated the earth as “matter and energy” and ignored the self-evident fact that the context that underlies all human economics is a living medium.

Technology was put forward as the solution to both pollution and resource constraints, though some economists simply denied that production involves waste. Solo described the idea that pollution is a function of technology and growth as “facile and ever-so-popular,” and claimed that “industrially advanced economies have the capacity to eliminate all noxious wastes … at a cost that … is easily bearable because of growth.” All that was needed, he said, was “reason in politics and in economic planning.”
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Solow was equally adamant that there is no connection between economic growth and pollution: “that way of looking at the problem is wrong.” Another adherent to the notion of the power of prices, Solow thought pollution was not a consequence of production but of an “important flaw in the price system” whereby producers were allowed to dump their waste into the environment without paying the full cost. Solow felt this situation could be very easily fixed by the “simple expedient” of regulating the wastes or charging special taxes.
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It should be noted that Solow was writing before the neoliberal condemnation of regulation foreclosed this proposed option.

While there was some truth in Solow’s claim at that time, Meadows and coworkers noted in their reply to their critics that economists were simply ignoring the scale of the extraction of new natural resources, which was doubling every fifteen years, as was the waste material being dumped into the environment.
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It is salutary to note that, while some of Solow’s “simple expedients” were indeed applied to the cleanup of developed world cities over the next few decades, those improvements were accompanied by the accelerating pollution of industrializing countries such as China and India. Developed environments certainly got cleaner as heavy industry moved elsewhere, but corporations simply shifted the most toxic industries offshore, away from Western eyes. The North Pacific gyre, covering an area the size of Texas (or even of Australia, in one report), with its burden of floating plastic and suspended microplastic fragments, sourced from both North America and Asia, is another example of pollution exported, and thus largely unseen.
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Growth Embraced as the Only Solution to Poverty

Numerous critics of
Limits
argued that economic growth is indispensable to relieve the problems of poverty in the third world, suggesting that concern about natural limits tramples on third world interests. The
New York Times
reviewer of
Limits
, Leonard Silk, made explicit a common assumption about the necessity of growth. Writing of the hundreds of millions of people living in desperate poverty, he argued that “their problems cannot be solved by redistribution of existing world income”—an axiom that required no further comment or evidence and that presaged the campaign to “grow the pie, not slice it differently.” Thus, “economic growth will be essential to prevent worsening misery, starvation, chaos and war.” Silk did acknowledge that some sort of action was needed to conserve the environment and recommended a social revolution in which growth would continue but the goal would somehow shift from “quantity” to “quality.”
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Most economists, however, placed no such qualifications on their hymn to growth. Most did not even mention redistributive options, and those who did dismissed them out of hand. Solow considered redistribution totally impractical and unrealistic, and, though he acknowledged that equity would not automatically follow from growth, he believed there was no hope at all without it: “The
only
prospect for a decent life for Asia, Africa and Latin America is in more total output.”
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Beckerman concurred: “A failure to maintain economic growth means continued poverty, deprivation, disease, squalor, degradation and slavery to soul-destroying toil for countless millions of the world’s population.”
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The so-called “plight of the poor,” with accelerated economic growth as its sole solution, would become a core strand of antienvironmental rhetoric throughout the subsequent decades—and remains so today, as commentators endlessly enthuse about growth “lifting millions out of poverty.”
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These arguments for economic growth drew support in the third world, partly because for centuries, there had been valid grounds to be suspicious of first world plans and prescriptions—limiting growth could be seen as yet another; and partly because wealthy elites remained in control of many developing economies, where their interests coincided more closely with their brethren in the global north than with their own populations, composed largely of peasant farmers. But the rejection of limits thinking and action has not worked automatically in favor of the people of the global south, as it was said to do; rather, the energy- and resource-intensive production techniques of the developed economies have been transplanted almost everywhere; energy-intensive corporate agriculture in particular has dispossessed yet another tranche of the global peasantry and driven it into the megaslums that arose in the late twentieth century (discussed in chapter 9).

The MIT team was explicit in rejecting the idea that economic growth was necessary to assist the poor—or even that it was likely to do so. Quite the reverse: “Historically at least, growth of population and of capital has been correlated with the concentration of wealth and with rising gaps in the absolute income of the rich and the poor.”
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Several factors influenced the dismissive reaction to the scientists who issued the warnings of trouble ahead. A tendency to overstatement did a disservice to their own cause and facilitated the “doomster” label. Ehrlich’s predictions of looming food shortages and concomitant violence in the immediate future turned out to be exaggerated, though the population did grow at rates close to those he predicted, and, though premature, Ehrlich was not really wrong about prices. In the first five years of the new century, key metals such as copper, nickel, and gold doubled or tripled in price, as did oil and natural gas, while grains were not far behind, and continued to rise as the developed world pursued biofuel substitutes for petroleum.
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These increases reflect the precise situation described by the MIT team: expanding growth in demand unmatched by supply expanding at a similar rate.

Hardin’s harsh ideas made ecologists an easy target for Right and Left, north and south—but especially for the Left and representatives of the third world. The “lifeboat” essays were understandably repugnant to people who were seen by Hardin as the irresponsibly breeding poor, much as Malthus had seen the English poor in 1800. His lifeboat ethics—the equivalent of throwing the world’s poor to the sharks—were analogous to Malthus’s ethics, which had justified incarceration in a workhouse.

The technocrats, such as the Club of Rome founder Aurelio Peccei and the staff of UN agencies concerned with the same problems, were a different case. Despite accusations that they were in league with predatory capitalism,
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people like Peccei and Strong had no intention of throwing anyone to the sharks. Quite the reverse: like Carter and Trudeau, this group of so-called doomsayers wanted to measure and assess the crisis ahead and build an effective management plan that would preserve hope for the postcolonial world. There is certainly room for a critique of management: it is quite possibly a fantasy that humans can, ultimately, manage the earth, and faceless managers dictating the course of the world economy are not susceptible to any democratic accountability. It is ironic that organizations such as the World Trade Organization, the World Bank, and the International Monetary Fund—as well as the giant corporations themselves—which exert determinate influence on the world economy, are just as undemocratic as the managers envisaged by Peccei, and probably far more so.

The Club of Rome, the Meadows team, and ecological economists in general challenged the wisdom of unfettered growth as the postwar explosion took its toll. In part II, I return to the beginning of the twentieth century to look at the strategies cultivated by business to guarantee that growth: the construction of consumerism early in the century, the neoliberal “revolution” after the crisis of the 1970s, and the pursuit of “development” in the third world from the end of World War II.

II

Chasing Growth

A rising tide that lifts all boats drowns those who have no vessel.

—Modern proverb of uncertain origin

5

Growth and Consumerism

The development of consumer societies meant the erosion of the traditional values and attitudes of thrift and prudence. Expanding consumption was necessary to create markets for the fruits of rising production.

—Sharon Beder, 2004

Growth and Capitalism

As outlined in chapter 1, one great innovation of capitalism that set it aside from all earlier trading systems was the wholesale application of the economic surplus to the expansion of production, setting in train a regime of accumulation, a dynamic of ongoing growth, and a route to what looked like ever-increasing wealth. It established a system that depends on expansion just to keep going.

The basic financial apparatus for corporate capitalism had already been created during the mercantile era—the limited liability stockholding enterprise. The Australian journalist Murray Sayle, writing about the symbiotic relationship between the capitalist system and hydrocarbon-based industrial technology, locates the genesis of capitalist finance as we know it in the United East Indies Company (Vereenigde Oost-Indische Compagnie, or VOC), founded in the Netherlands in 1602 and chartered by the government.
¹
For the first time, investors put money into an entity, not toward a specific venture or voyage; their liabilities were confined to the amount they contributed, and the investment could be traded at any time on the local commodity market. In this way, tradable shares in a corporate body began. The system depended on growth to function:

The new system showed a well-marked, still powerful feature—to attract more investors, and satisfy the existing ones, the enterprise had to have, or seem to have, rapid continuous growth, the only inducement to offset the risk being the investors’ expectation of getting more out than they had put in. The VOC duly expanded at high speed.
²

The ventures of the VOC had no pretensions to being beneficial for the broader society; it provided a vehicle for individual gain.