[Rachel #625: Sustainable Development, Part 2]
Fri, 20 Nov 1998 14:07:40 -0500
> . .
> . RACHEL'S ENVIRONMENT & HEALTH WEEKLY #625 .
> . ---November 19, 1998--- .
> . HEADLINES: .
> . SUSTAINABLE DEVELOPMENT, PART 2 .
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> SUSTAINABLE DEVELOPMENT, PART 2
> In his excellent short book, BEYOND GROWTH, economist Herman
> Daly says that every economy faces 3 problems: allocation,
> distribution, and scale. What do these terms mean?
> Allocation refers to the apportioning of resources among
> different products --in other words, deciding whether we should
> produce more corn, more cars, more bicycles, more jelly beans, or
> more hospitals. Because resources are limited, we can't have
> everything, so we must allocate our resources in some way to
> provide the goods that people want and can afford to pay for.
> The way we do this is "the market" which sets relative prices for
> goods. Prices act as signals that cause people to put more
> (or fewer) resources into creating particular products that other
> people are willing and able to buy.
> The second problem faced by every economy is distribution
> --apportioning goods (and the resources they embody) among
> different people, not among different products. Nearly everyone
> agrees that goods should be distributed in a way that is fair
> (though we may disagree on the precise meaning of "fair"). If
> you don't believe this statement is true, think of an extreme
> case. If one person received 99% of all the benefits provided by
> the U.S. economy, and all other citizens had to divvy up the
> remaining 1%, almost everyone would agree that this was an
> "unfair" or unsatisfactory distribution of benefits. The vast
> majority of people would say, "There is something wrong with this
> picture." This extreme example is intended to show that nearly
> everyone agrees that there are "fair" and "unfair" distributions
> of goods. What is a "fair" distribution --and how we should
> achieve it --are the main questions that give rise to "politics."
> Unfortunately the market cannot solve the problem of fair
> distribution. Left alone, a market economy tends to create
> inequalities that grow larger as time passes. Both the economic
> successes and failures of individuals tend to be cumulative --the
> successful tend to succeed again and again while the unsuccessful
> tend to remain unsuccessful. Marriages tend to result in further
> concentration of wealth. Furthermore, as Daly says, dishonesty
> and exploitation are not necessary to explain inequality but they
> certainly contribute to it. None of these statements is
> absolute --you can point to many individual exceptions to each of
> them --but the tendencies that they describe are well-recognized.
> No, the market cannot solve the problem of unfair distribution.
> This problem must be solved by people deciding what is fair, then
> making public policies intended to achieve a fair distribution.
> After those decisions have been made, then the market can
> allocate resources efficiently within the
> politically-established framework of fairness.
> The third economic problem is the problem of scale --how large
> can an economy become before it begins to harm the ecosystem that
> undergirds and sustains it? Here again, the market does not
> --cannot --provide any answer. The market offers no mechanism
> for deciding what is a desirable scale or for achieving that
> scale. You can have an efficient allocation of resources and
> a just distribution of benefits, yet still have an economy that
> grows too large and consequently damages the ecosystem. (Each of
> the three problems --allocation, distribution, and scale --is
> separate and each must be solved separately.)
> The ecosystem provides us with two major services --it provides
> resources that we can use (such as air, trees, copper deposits)
> and it provides a place to discard our wastes. Within limits,
> the ecosystem can regenerate certain resources (air and trees,
> for example), and it can absorb a certain amount of wastes,
> recycling them via the services of the detritus food chain. (See
> REHW #624.) Unfortunately, it is quite possible for the economy
> to grow so large that it exceeds the capacity of the ecosystem to
> regenerate itself and/or to absorb our wastes. At that point,
> the economy has grown unsustainably large and further growth will
> diminish the carrying capacity of the planet --the capacity to
> support life, including human life.
> As we saw last week (REHW #624), there is abundant evidence that
> the human economy, worldwide, has already grown so large that it
> has exceeded some of the ecosystem's capacity to regenerate
> itself, and has already grown so large that it has exceeded part
> of the ecosystem's capacity to absorb our wastes. These problems
> first appear on a local scale (the U.S. has nearly exhausted its
> reserves of tin, nickel, chromium, petroleum, and many other
> mineral resources, and many U.S. cities are presently unable
> to provide their inhabitants with healthful air because of waste
> gases from automobiles). Eventually economic growth reaches a
> point at which local problems become global. For example, in
> recent years we discovered that we had inadvertently damaged the
> Earth's stratospheric ozone layer with our CFC wastes, and that
> most of the world's marine fisheries have been severely degraded
> by overfishing. We are now making similar unhappy discoveries at
> a steady (or perhaps accelerating) pace.
> Economists, and business and political leaders, acknowledge only
> two of the three economic problems outlined above --the problems
> of allocation and distribution. The problem of scale --caused by
> growing quantities of materials and energy flowing through the
> economy (see REHW #624) --the problem of scale has still not been
> acknowledged by most economists, business people, or politicians.
> To them, continued growth can only be good. The vast majority
> of them deny that the scale of the economy must be kept
> comfortably within the regenerative and absorptive limits of
> the ecosystem (if they have thought about it at all).
> There is a deep and abiding reason for their denial. For the
> past 400 years, growth has been the central organizing principle
> of all European societies, and especially of American society.
> Economic growth has substituted for politics, deflecting
> attention away from the contentious problem of fair distribution:
> even a small slice of the pie will grow larger each year if the
> total pie keeps growing larger. Thus growth has allowed us to
> avoid confronting difficult ethical questions about the fair
> distribution of income and wealth. So long as the pie kept
> growing we could accommodate the rising demands of slaves,
> farmers, immigrants, industrial workers, women, and so forth.
> As William Ophuls has said, "We have justified large differences
> in income and wealth on the grounds that they promote growth and
> that all would receive future advantage from current inequality
> as the benefits of development 'trickled down' to the poor. (On
> a more personal level," Ophuls says, "economic growth also
> ratifies the ethics of individual self-seeking: you can get on
> without concern for the fate of others, for they are presumably
> getting on too, even if not so well as you.) But if growth in
> production is no longer of overriding importance the rationale
> for differential rewards gets thinner, and with a cessation of
> growth it virtually disappears.... Since people's demands for
> economic betterment are not likely to disappear, once the pie
> stops growing fast enough to accommodate their demands, they will
> begin making demands for redistribution," Ophuls says.
> The end of growth will change American (and European) politics
> fundamentally, forcing us to confront basic ethical questions of
> economic fairness. For this reason, the environmental dangers of
> growth are ignored by those who think they have the most to lose
> --our business and political leaders (and their academic support
> staff, the mainstream economists).
> Now stay with me as we probe a little deeper into growth. This
> may seem obscure, but it is important.
> Growth --the central organizing principle of our society (we
> could also call it the main ideology of our society) has been
> grounded in an ethical principle developed by the English
> philosopher Jeremy Bentham and elaborated by John Stuart Mill in
> the 1830s. Bentham argued that the goal of public action was
> "the greatest good for the greatest number" --a goal that most
> people would probably embrace today without thinking about it
> very carefully.
> Now that the end of growth is in sight (because we have begun to
> hit nature's limits), we can no longer pretend that we can
> achieve the greatest good for the greatest number.
> Confronting the limits of the planetary ecosystem, we are forced
> to ask, how much good can we achieve for how many people for how
> long? As Daly says, we can have "the greatest good for a
> sufficient number" or we can have "sufficient good for the
> greatest number" but the "greatest good for the greatest number"
> we cannot have. Daly favors seeking "sufficient good for the
> greatest number" --meaning the greatest number of humans that can
> be supported year after year into the indefinite future. If your
> goal is to maximize human welfare, this is the formula that does
> it. If we live sustainably, without exceeding the planet's
> capacity for regeneration and the absorption of waste, billions
> or trillions of humans will ultimately be able to enjoy the good
> life on planet Earth, world without end. The alternative (which
> is the path we are presently on) is to load up the planet with 12
> to 20 billion people in the next century until the ecosystem
> collapses, thus diminishing the carrying capacity of the planet
> and greatly reducing the total number of humans who can ever
> enjoy a good life on Earth. If you want to maximize human
> enjoyment of the good life, the choice is clear.
> An essential step toward sustainable development --offering the
> greatest number of people a sufficiency of resources for the good
> life --will be policies explicitly aimed at reducing huge
> economic inequalities. Growth will no longer substitute for
> ethical public policies.
> One of the main features of the modern world that creates and
> sustains inequality is the high human birth rate. An abundance
> of people provides a pool of cheap labor to do the world's work.
> A high birth rate creates steady pressure driving wages down. In
> ancient Rome the word "proletariat" meant "those with many
> children" and the main role of the proletariat in Roman society
> was to procreate to serve the patricians. Failure to help people
> control their own numbers --then as now --is a implicit cheap
> labor policy. A high birth rate tends to maintain inequality,
> and a reduced birth rate has the opposite effect, tending to
> equalize incomes and wealth.
> Small wonder, then, that so many of the world's people are denied
> the knowledge and the means for voluntarily eliminating unwanted
> fertility. In too many societies (including our own) the
> knowledge and means for voluntarily controlling fertility are as
> inequitably distributed as income and wealth. The wealthy have
> little difficulty controlling their numbers; the technologies are
> readily available to them. The poor find it not so easy. There
> is a reason for this.
> More next week.
> --Peter Montague
> (National Writers Union, UAW Local 1981/AFL-CIO)
>  Herman Daly, BEYOND GROWTH (Boston: Beacon Press, 1996).
> ISBN 0-8070-4708-2. Hereafter cited as Daly.
>  Daly, pg. 159
>  Relative prices measure marginal opportunity costs; see Daly
> pg. 222. Efficient allocation is an allocation that corresponds
> to effective demand, i.e., the relative preferences of citizens
> as weighted by their relative incomes. An inefficient allocation
> is one that uses resources to produce items that people will not
> or cannot buy, and it fails to produce items that people want,
> can afford to buy, and would buy if they could find them. See
> Daly pgs. 159-160.
>  Daly, pg. 207.
>  U.S. Bureau of Mines, MINERAL FACTS AND PROBLEMS [Bureau of
> Mines Bulletin 675] (Washington, D.C.: U.S. Government Printing
> Office, 1985).
>  William Ophuls, ECOLOGY AND THE POLITICS OF SCARCITY (San
> Francisco: W.H. Freeman, 1977), chapter 6.
>  As a matter of logic and mathematics, we never could achieve
> the greatest good for the greatest number because it is
> impossible to maximize two variables in a function.
>  Daly, pg. 220.
> Descriptor terms: growth; sustainable development; economics;
> herman daly; beyond growth; population; human poipulation;
> prices; markets; allocation of resources; distribution of
> resources; scale of the economy;
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