Collision Course: Endless Growth on a Finite Planet (26 page)

The Consumption Route to Prosperity

The extension of current trajectories of modernization, industrialization, and urbanization assumes that the Western template of progress can be applied indefinitely until the stage that development economist Rostow called mature has been attained, the consumption-driven wealth of the past century or so,
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which all people can then enjoy.

“The Global Middle Class Roars,” Rupert Murdoch’s lecture on his vision of human progress, supports the impression that everyone can and will catch up and eventually become middle class—or even “beyond.” Everyone is running in the same race, a race without material constraints. In Murdoch’s worldview, the guarantee of this advance is an ever-expanding productivity (defined as output per worker; see box 9.2); if the third world could emulate the West in this respect, “the world would grow fantastically richer and everyone would be better off.”
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There is a kind of precedent for this; it is, after all, very close to what occurred over the past century or so for most of the working class of the first world, despite horrific conditions in the previous century. Ninety-five percent of the first world’s population now fall within the top quintile of world income, making first world middle classes and employed working classes part of the global rich.
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Thus it can be argued that a precedent exists for a gargantuan extension of middle-class consumption to 95 percent of the world’s huge population during the current century: if Europe and its offshoots could do it, why not everyone else? This confidence about catching up, however, rests on the rickety assumption that what has happened before can always happen again. In this scenario, the entire world population of seven billion joins the stairway to imitative affluence described in chapter 5. I have already examined one of the fallacies involved here, noting that the empty world into which Europe expanded is long gone, transformed by the European capitalism that depended on its fabulous riches.

The vision advanced by Murdoch also skips over the gulf between the poor of the third world and the “battlers” of the first, offering an effortless transition, automatically provided by “market forces.” According to Murdoch, “When the poor are given access to the global economy they build a better life for their families and a brighter future for their countries.” These views mirror the APEC report examined in chapter 6. Mobile phones, airborne holidays, and a diet rich in meat are the hallmarks of the ascending future, and this is what “lifting millions out of poverty” is suggesting. The meaning of the word “poor” in Murdoch’s lectures conflates the colloquial first world meaning (you can’t afford a dentist) with the World Bank’s quantified definition of income below $1 a day. Though this benchmark was updated to $1.25 a day in 2005,
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it remains immiseration at a very different level from poverty defined as “below middle-class consumer status.” The emphasis on the roaring of the new middle class implicitly suggests that poverty is about lacking disposable income for consumption. In reality, any transition to the flexibility of discretionary expenditure is far beyond the people the World Bank calls poor, who need adequate daily food, clean drinking water, and sanitation long before they will fly off to Bali for a break.

It is important to remember Peter Edward’s careful analysis of just who has received the proceeds of the economic growth of the recent past: half went to the world’s top decile, almost all in the first world, another quarter went to the already established Chinese middle class, and most of the rest edged many of the poor of China toward or just over the $2 a day mark.
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China may continue to be the exception (box 9.3), but Edward’s data throw grave doubt on the assurances of the Indian finance minister that industrial development is providing a direct and indispensable route to the end of poverty. Clearly, the neoliberal market regime is not providing prosperity for all. Rather, it has ameliorated extreme poverty in China and provided Western levels of consumption to a small sector of the Chinese population—and to a smaller segment of the Indian and other third world populations.

Growth and Poverty: Smoke and Mirrors

Equitable, or even reasonably fair, distribution is not relevant to market solutions, since ongoing growth is supposed to fix extreme poverty eventually without bothering about questions of equity. It continues to be the preferred route to achieving the UN’s Millennium Development Goals (MDGs), minimal as they are, including the halving of extreme poverty and hunger by 2015. Like the World Bank’s 2007 predictions of reductions in the non-middle-class poor, the MDGs use percentages as their benchmark. While the original undertaking in 1996 was to cut the
numbers
of undernourished people in half by 2015, the MDGs adopted in 2000 promised to cut the
prevalence
of undernourished people in half, a change that reduced the target by hundreds of millions.
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The FAO’s 2011 revision of its criteria for defining hunger has further minimised the task. In 2010 the FAO estimated the number of hungry (undernourished) had fallen to just under 800 million in the mid-1990s, had risen again to nearly 850 million by 2007, and had jumped to over a billion after the financial crisis of 2008.
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The 2009 MDG report warned of “a long-lasting food crisis” and noted that though international food prices had decreased during 2008, this did not flow through to local markets: “Consumer access to food in many developing countries, such as Brazil, India and Nigeria, and to a lesser extent China, did not improve as expected.”
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Using the new 2011 definition, the FAO identified far more hungry people back in 1990 than in previous estimates, so it was able to report a steadily falling number ever since.
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Thus, by 2013, the annual MDG report was claiming that Goal 1, the halving of extreme poverty and hunger, had already been achieved—though it noted on the same page that 1.2 billion people were still living in extreme poverty.
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The success claimed here relies in part on the fact that it is the percentage of extreme poor that is being halved; the actual number is not being halved and remains large. A second influence on the success claimed is the FAO’s redefinition of hunger, using narrow measures that seem certain to underestimate its extent. The 2011definition measures caloric needs for a
sedentary
lifestyle; if the threshold were set to requirements for
normal
activity, the number of undernourished people would rise from 868 million to 1.33 billion. The new definition, moreover, includes only periods of undernourishment lasting more than one year, and so excludes any shorter food crisis or price spike.
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Averaging extreme poverty and hunger across the world also allows the distortion discussed in chapter 7, whereby significant improvements, especially in China, mask static or declining situations in most other countries.

The FAO’s
State of Food Insecurity in the World 2012
(SOFI12), on which the MDG hunger estimate is based, depicts the halving of hunger as “within reach” and argues that restored economic growth is the number one requirement to get there.
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Like the Brundtland Commission twenty-five years earlier, the FAO points out that growth alone is not sufficient and that appropriate public policy is needed to make sure the poor can share in it, but this aspect is left entirely in the background. Frances Moore Lappé, founder of the Small Planet Institute, and her research team observe that the word
growth
appears over 250 times in SOFI12, whereas there are only nine references to equity,
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and
sharing
appears once. As their succinct analysis shows, the FAO seems to be blind-sided by the idea of the efficacy of growth, a view not unexpected in the neoliberal universe. It is stressed again and again, even though SOFI12 explicitly concedes that the “linkage between economic growth and nutrition has been weak.”
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Lappé and colleagues point out that the idea of growth has been wedded to ideas about “removing government and privileging the private sector,” but making this aspect so prominent could lead a reader of SOFI12 to overlook completely the more crucial need for equity and government action.

The Lappé team’s research into where hunger has actually been reduced contradicts the supposed efficacy of private enterprise and the growth it is assumed to generate, and indicates that government policies have probably been more crucial. The most dramatic success occurred in Ghana, where growth has been low over the last twenty years; there, the government has had programs to pay cash to mothers living in extreme poverty and supports both export and food-growing agriculture. Vietnam’s success is connected to land reform, irrigation subsidies, support for smallholders, and control of price fluctuations. Brazil’s progress, also significant, again relies on cash payments to mothers living below the poverty line, land grants, and support for smallholders.
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None of these programs would be favored under free market rules.

The MDG target of decent work for all also remains elusive. By the end of 2005, well before the world recession, global unemployment was already at its highest level ever and had grown by 25 percent in the previous ten years, suggesting that growth in the free market era has never generated sufficient jobs. Growth is advanced as the primary provider of employment, but its performance in this respect was not impressive, even before the global economic crisis. The trend toward higher unemployment continues, with the 2013 MDG report recording an additional 67 million people without jobs since 2007.
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Overall, then, economic growth is not closely related to improvements in the welfare and well-being of the poor, including the extreme poor and the hungry. After thirty years of galloping economic growth worldwide and another thirty years of growth at a more modest rate (though very rapid in China), progress for the least advantaged is still lagging. The global economy is eight to ten times the size it was in 1950, but its fruits have not reached the poor at anything like the same rate and, in many places, not at all.

Wealth: Straggler’s Destination or the Other Side of Poverty?

There are two closely interrelated problems with the cornucopian notion embedded in the straggler metaphor, where everyone will ultimately catch up and live the affluent life. In the first place, except for China, the past sixty-five years do not provide much confidence that such a catch-up will be achieved in the foreseeable future, even if the percentage of extremely poor people (under a relaxed definition)
is
halved by 2015. Second, it relies on infinite economic growth and does not take into account any depletion of resources or loss of sinks for waste. In chapter 6 I stressed the enormous volumes of paper and oil needed for China alone to attain a US per capita level of consumption (or even a European level, about half that of the US and Australia). The economist Paul Ekins looked at the overall arithmetic and concluded there was no prospect of finding sufficient resources and sinks for the
universal opulence
outcome. Even to ensure one-fifth of current Western affluence for the people of the third world would require, at an absolute minimum, an immediate freeze on per capita consumption in the first world.
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The same dilemma dogged the 2009 Copenhagen climate conference and affects the entire climate crisis. As Bolivia’s chief negotiator, Angelica Navarro, explained to Amy Goodman of US independent radio’s
Democracy Now!
, the first world has only 20 percent of the world’s population, yet it has produced more than 90 percent of the existing greenhouse gas pollution in the atmosphere; this constitutes a huge climate debt as far as third world people are concerned:

So we are the ones who are supposed now to be mitigating. And I’m asking, what will a developing country, rural men or women—indigenous women in Bolivia doesn’t even have electricity—will mitigate? And for what? So that developed countries can even still have two, three cars? … We think that they are negotiating not an environmental agreement. They seem to be negotiating an economic agreement.
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