Tuesday, January 30, 2007

The Imperial Prosperity Story

Continuing my discussion of David Korten's Alternative Radio speech based on The Great Turning: From Empire to Earth Communities....

Toward the end of his talk Korten emphasizes that the core of his ideas represent values shared by a super-majority of Americans. They are, he says, neither specifically conservative nor specifically liberal values. I think this is true, but his economic perspective tends to undermine whatever support he might hope to find among conservatives.

I read somewhere that liberalism is entirely based on ignorance of basic economic facts. This is, of course, untrue. It would be more to the point to say that liberals just aren't willing to subjugate all of our values to these basic economic facts. And this is one of Korten's main points.

Unfortunately, Korten's views fall under the broad label of Malthusian economics, and in many circles this means that once the label is applied, these views can be openly mocked without actually being engaged.

In particular, a lot of Korten's doomsaying turns on the assumption that the world is about to run out of cheap oil and that as it does the infrastructure of our economy will be broken as long haul transports become infeasible and our Walmarts and similar businesses become "stranded assets" as we no longer have cars to take us to them.

This is the particularly Malthusian bit, and it exhibits the classic Malthusian weakness -- it underestimates the progress of technology. As I write, the technology behind renewable energy sources is stepping up to the challenge of eliminating oil dependency without requiring changes to our patterns of behavior. Ever increasingly efficient wind farms and solar energy plants are making other technologies like hydrogen cell vehicles suddenly practical.

But this is relatively incidental to Korten's critique of "the imperial prosperity story." The suggestion that the machine is destined to wear itself out is only brought up to give urgency to the need for change. The fact is the real problem is with the intrinsic injustice of the economic system.

Korten's view are largely the product of his experience working in developing nations, initially working to bring the gospel of capitalism to these nations, but then changed as he saw the effects of American consumerism on people in other lands. "It is axiomatic once you think about it," Korten says, "for a few to be on the top, the many must be on the bottom." Pushing the point even further he says, "conventional economic growth indicators too often measure the rate at which productive resources of the poor are being appropriated by the rich and converted to garbage."

So here we've reached the point where economic theory slams into ethics. Is it really true that everyone eventually benefits from a growing economy, or does free market capitalism necessarily involve a group of people somewhere being crushed beneath the wheel?

Honestly, I don't know. There's compelling evidence on both sides. I feel like a better economic model is needed.

1 comment:

Lee said...

Andy, thanks for posting on this stuff. Very thought-provoking.

When I think of the classic liberal economic fallacy I think of the idea that there is only a fixed amount of wealth and that the important thing is to make sure it's distributed equitably. But this ignores the fact that wealth isn't fixed and that capitalism appears to be the best system yet devised to propel economic growth, which does appear to benefit nearly everyone, albeit unevenly. It's hard to argue that, other things being equal, the poor in capitalist countries aren't better off than elsewhere, in terms of consumption at least.

However, I'm less convinced that the rate of growth that would actually be necessary to pull the world's poor out of poverty actually is sustainable from an ecological point of view. I.e. it's not clear to me that it's possible for the entire world to live at western standards of prosperity before we reach some ecological tipping point (whether that be peak oil, climate change, whatever) that will demand a serious cutback in the way we live. I don't rule out that there may be some technological fix for this problem, but I'm not sure that's really a prudent (or ethical?) road to go down - to assume that we'll be able to fix whatever problems we create through more ingenious applications of technology.

Looking forward to future installments!