Collision Course: Endless Growth on a Finite Planet (28 page)

Vandana Shiva has pointed to values that are unreflected in GDP but are vitally important to people who still produce their livelihood in symbiotic cooperation with nature. Shiva describes the cultural and spiritual connection that India’s farmers have with their land and celebrates the communal practices and technologies that have kept India’s agriculture viable for millennia. She vigorously denies that the peasant life is “below dignity” and something from which to be delivered. “It is disposability that robs people of their dignity and selfhood,” she argues, not the work of tilling the soil and lighting a wood fire. GDP-based notions of well-being are irrelevant in this world.
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Shiva believes that indigenous and peasant people are entitled to control over the fate of their ancestral lands—the opposite view from the one that accords all resources to the control of the nation state. She also draws attention to the madness of expanding hydrocarbon-based infrastructure and technology as the climate crisis grows and the natural world is eroded: “chasing economic growth while ecosystems collapse is stupidity.”
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As noted in chapter 6, projected volumes of cars on the roads of India and China alone would require more than the entire current oil supply of the world (and that on top of the undiminished requirement for three-car garages in US homes). Even the most heroic and optimistic of the oil corporations admit that quantities adequate for such demand will never be pumped, while attempts to meet such demand will rely on ever more grossly polluting fossil alternatives such as tar sands (discussed in chapter 14).

India’s “superhighway”—the fifteen-year project to widen and pave 40,000 miles of dusty roads—has, according to journalist Amy Waldman, “cut a swath of destruction, swallowing thousands of acres of farmland, shearing off the fronts of thousands of homes” and grafted “western notions of speed and efficiency onto a civilization that has always taken the long view.… Ever-flashier cars, evidence of a frenzied new consumerism, leave bullock carts in the dust.”
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Local people oppose the cutting of trees along the roadsides—neem, mango, sisam, sacred fig, all valuable for shade as well as timber, fuel, fruit, and medicine—and the bifurcation of villages, where women now have to detour through occasional cuts in concrete barriers and sprint across the motorway to get to the water pump or carry back fuelwood. Though Waldman is in basic sympathy with modernization, she lucidly portrays the same two Indias as Arundhati Roy.

In
Soil Not Oil
, Shiva also touches on the destruction of India’s roadside trees in the service of the motorcar. She stresses, above all, the vital function of shade trees for the predominant foot and cart traffic on India’s roads. Planted sequentially for millennia, hundreds of years old, these trees blunt the searing Indian sun in areas where temperatures frequently exceed 40°C (104°F). Though presented as benefiting the nation, the roads primarily benefit car owners, less than 1 percent of the population. Even the potential market for cars is only a fraction of the whole population—a middle class of 216 million out of 1.2 billion people, according to Shiva’s 2008 estimate. What is more, many of the SEZs swallowing up the land of India’s farmers are dedicated to automobile manufacture and associated industrial processes. Some cars are made for locals, but a large part of the production is intended for export, which increased at 39 percent annually in the five years to 2008, fueled by trade liberalization policies and the arrival in India of numerous first world car manufacturers.
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Since the days of Lewis and Rostow, it has been assumed that farmers would be better off “liberated” from the soil and given “employment.” While the wealthy classes of third world countries, exemplified by India’s finance minister, have wholeheartedly embraced this recommended development path, no doubt in many cases genuinely believing it to be the way to national prosperity, it has often seemed to the poor that the objective is merely to steal their livelihoods, culture, security, and land.

The drive to bring “development” to the third world by industrializing both farming and manufacture assumes the universal applicability of the Western template and rests on the faith that unlimited resources and sinks will always be available for ongoing expansion. The dominance of neoliberal ideology since 1980 has only intensified the push for “progress through profit” and deepened the pursuit of unending economic growth as the only answer to unrelieved poverty. In its 2012
World Development Indicators
, the World Bank records nearly 2.5 billion people still living on less than $2 a day, only slightly fewer than in 1981. The bank also records nearly 1.3 billion people who remain in extreme poverty. As critiques of its methods indicate, these figures very likely underestimate the extent of both extreme and “non-extreme” world poverty. When attention is paid to the gross numbers in all the World Bank’s categories of “poor” people rather than to its ever-improving percentages, lifting millions out of poverty is accompanied by leaving billions behind.
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But neither minimal success in reducing the
numbers
of people in any category of disadvantage nor the obvious extension of injustice and dispossession in the service of cheap consumer goods for the first world has so far been able to cut through the generally accepted view that the growth strategy is making great progress in this respect.

This view is one of many that prevail despite the evidence. In part III, I examine the processes that make this possible, how ideas about the successes of growth and the triumphs of progress have been intentionally buttressed and propagated, so that they circulate as “common sense,” and fortified so that they are able to sweep aside contrary evidence and alternative values. I begin with the emergence of the big corporation around 1900.

III

Persuading the People

Touch that most vital of all business matters, the question of general federal regulation of industrial corporations, and the people amongst whom I live my life become immediately rabid partisans. It matters not one iota what political party is in power, or what President holds the reins of office. We are not politicians, or public thinkers; we are the rich; we own America; we got it, God knows how; but we intend to keep it if we can by throwing all the tremendous weight of our support, our influence, our money, our political connection, our purchased senators, our hungry congressmen, and our public-speaking demagogues into the scale against any legislation, any political platform, any Presidential campaign, that threatens the integrity of our estate.

—Frederick Townsend Martin, 1911

10

Propaganda: “Business Finds Its Voice”

The engineering of consent is the very essence of the democratic process, the freedom to persuade and suggest.

—Edward Bernays, 1947

Corporate propaganda directed outwards, that is, to the public at large, has two main objectives: to identify the free enterprise system in popular consciousness with every cherished value, and to identify interventionist governments and strong unions (the only agencies capable of checking the complete domination of corporations) with tyranny, oppression and even subversion.… The subject embraces a 75-year-long multi-billion dollar project in social engineering on a national scale.

—Alex Carey, 1997

The Corporation and Persuasion

The big corporation entered the US economy at the end of the nineteenth century and soon began to adopt professional public relations in its struggle with its opponents: first to counter popular resentment at the destruction of pre-corporate patterns of ownership and everyday life, then to contain dissatisfaction with the cataclysmic failure of the corporate economic system from 1929 to the beginning of World War II. Corporations applied the new advertising techniques, so successful in the incitement of consumption as a guarantee of ongoing growth (see chapter 5), to the promotion of the capitalist system itself. They proposed what they called “free enterprise” as the natural path to the “good life,” defined as a life of material comfort and abundance.

After the war, this practice continued uninterrupted, but a new centerpiece emerged, the ideology of the “bigger pie,” where economic growth was given the role of spreading abundance without disturbing economic power. In this refinement, expansion could encourage a docile and compliant workforce and democracy could be made safe for corporations. Though productivity had been considered a promising substitute for redistribution back in the 1920s, it lost traction during the long years of the Great Depression. Now, however, the idea of redistributive justice was jettisoned by many in the unions and the Democratic Party who had been former opponents of business. Economic growth was embraced broadly, and the new corporate order could expand unchecked as the solution to social discontents. As growth became the self-evident, obvious, and inevitable basis for almost all government policy across the world, collision with planetary limits crept closer.

The Fall of Economic Growth?

H. W. Arndt in his
Rise and Fall of Economic Growth
(1978) outlined an abrupt emergence of economic growth as a preeminent policy objective for governments in the course of the 1950s. This approach appeared in tandem with the emergence of “development” as described in chapter 7 and was promoted by some of the same economists—W. Arthur Lewis, for example, and Walt Rostow.
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Just as material development had not been a specific policy focus before the war, Arndt found that growth too had not been an object of government policy during the first half of the twentieth century. In the roaring twenties, for example, though growth was spectacular, “economic growth was hardly ever discussed by academic economists,” and neither businessmen nor politicians thought its promotion a proper activity of government anyway. Examining the work of prominent academic economists and government officials, chiefly from the United States and the UK, Arndt identified several imperatives that underlay the new direction after 1950, all of them clustered around the idea that growth was the best solvent for class discontents aimed at redistribution and an essential prop to full employment. After the traumatic unemployment of the Great Depression, the latter had come to be considered an essential social objective.
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Arndt traced the various strands of the critiques of growth launched in the 1960s and regretfully concluded that the critics had succeeded and the push for growth had had its day; by the early 1970s, he argued, growth was an idea in decline. Yet, as is evident from public discourse in the years since then, the status of growth as the central objective of policy recovered from all setbacks. Arndt grossly overestimated the impact of the critique, or perhaps underestimated the ability of the promoters of growth to counterattack.

Emergence of the Big Corporation

The modern corporation began wrestling with issues of image and legitimacy soon after its rapid emergence in the United States in the late nineteenth century. In 1870, there were no national US corporations at all, and the average factory employed fewer than ten workers.
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A mere thirty-five years later, by the early 1900s, the vital industries of the entire country were dominated by large corporations, with fully two-fifths of US capital in the hands of a few large new firms. The age of the giant “vertically integrated, bureaucratically managed corporation”
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began rapidly, and Adam Smith’s free enterprise economy, comprised essentially of a multitude of small and medium-sized businesses in healthy competition, would soon become a thing of the past.

This revolution took off in the context of a protracted series of depressions, stretching from 1873 through to the mid-1890s. A handful of significant mergers occurred from the 1880s on, beginning with the creation of the Rockefeller-dominated Standard Oil cartel in 1882.
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Two further waves of mergers occurred in the period from 1890 to 1902, hundreds of them in the second tranche (1898–1902), when around two thousand independent businesses disappeared.

Alfred Chandler, historian of the rise of the modern corporation, argues that merger (or horizontal integration) sometimes enabled companies to fix prices and to control the level of production, but it was insufficient to establish decisive advantage and ongoing growth. In Chandler’s view, what achieved this end was vertical integration, which was adopted by the newly merged entities in almost all the most successful enterprises.
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In this adaptation, single multifaceted units controlled the entire chain of production, from the supply of raw materials to the marketing of finished products, overcoming vulnerability to market fluctuations in supply prices and, in fact, superseding the putative market role of allocation altogether by internalizing the whole process. As Chandler puts it, “the visible hand of management replaced the invisible hand of market forces.”
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This strategy cut costs and improved profits, which was useful as a counter to the price contraction during the long depression of the late nineteenth century; it extended through the first two decades of the new century. The combination of merger with vertical integration established the business structure of the US economy for the long-term future. Indeed, a great many of the corporate giants still familiar in the twenty-first century, such as Coca-Cola, DuPont, and Alcoa, had been established by 1917.
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By the turn of the twentieth century, these new behemoths had already begun to extend their consolidated activities internationally. In 1914, foreign direct investment already accounted for 7 percent of US GDP, and by the time of the 1929 Wall Street Crash, US private interests held over $8 billion in foreign loans and investments.
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These developments, enhanced by the profits the United States reaped from its role as industrial supplier to the UK and its allies in two world wars, prepared US business for the internalization of much of the world economy within its giant corporations after World War II. These US companies were the prototypes of the modern transnational corporation (TNC) and were increasingly emulated by corporations based in Europe and Japan. By the 1960s, between 20 and 30 percent of world trade took place
within
transnational corporations, a proportion that had grown to some 40 to 50 percent by 1990. At that time, more than half of US exports and imports were internal transactions of TNCs.
¹⁰
In the twenty-first century, the Fortune Global 500 includes numerous TNCs based in China and several more scattered throughout the developing world, mainly in Asia.
¹¹
The globalization era has favored the ascent of transnational capital, which now dominates world trade, foreign investment, and world production.