Small Is Beautiful: A Study of Economics as if People Mattered (14 page)

alienated from living nature, who promotes his own scale of priorities by arguing in economic terms that we cannot 'afford' any other. In fact, any society can afford to look after its land and keep it healthy and beautiful in perpetuity. There are no technical difficulties and there is no lack of relevant knowledge. There is no need to consult economic experts when the question is one of priorities. We know too much about ecology today to have any excuse for the many abuses that are currently going on in the management of the land, in the management of animals, in food storage, food processing, and in heedless urbanisation. If we permit them, this is not due to poverty, as if we could not afford to stop them; it is due to the fact that, as a society, we have no firm basis of belief in any meta-economic values, and when there is no such belief the economic calculus takes over. This is quite inevitable.

How could it be otherwise? Nature, it has been said, abhors a vacuum, and when the avail- able 'spiritual space' is not filled by some higher motivation, then it will necessarily be filled by something lower - by the small, mean, calculating attitude to life which is rationalised in the economic calculus.

I have no doubt that a callous attitude to the land and to the animals thereon is connected with, and symptomatic of, a great many other attitudes, such as those producing a fanaticism of rapid change and a fascination with novelties- technical, organisational, chemical, biological, and so forth -

which insists on their application long before their long-term consequences are even remotely understood. In the simple question of how we treat the land, next to people our most precious resource, our entire way of life is involved, and before our policies with regard to the land will really be changed, there will have to be a great deal of philosophical, not to say religious, change. It is not a question of what we can afford but of what we choose to spend our money on. If we could return to a generous recognition of meta-economic values, our landscapes would become healthy and beautiful again and our people would regain the dignity of man, who knows himself as higher than the animal but never forgets that
noblesse oblige.

Eight

Resources for Industry

The most striking thing about modern industry is that it requires so much and accomplishes so little. Modern industry seems to be inefficient to a degree that surpasses one's ordinary powers of imagination. Its inefficiency therefore remains unnoticed.

Industrially, the most advanced country today is undoubtedly the United States of America. With a population of about 207 million, it contains 5-6

per cent of mankind; with only about fifty- seven people per square mile - as against a world average of over seventy - and being situated wholly within the northern temperate zone, it ranks as one of the great sparsely populated areas of the world. It has been calculated that if the entire world population were put into the United States, its density of population would then be just about that of England now. This may be thought to be an 'unfair'

comparison; but even if we take the United Kingdom as a whole, we find a population density that is more than ten times that of the United States (which means that the United States could accommodate more than half the present world population before it attained a density equal to that of the United Kingdom now), and there are many other industrialised countries where densities are even higher. Taking the whole of Europe, exclusive of the USSR, we find a population density of 2427 persons per square mile, or 4.25 times that of the United States. It cannot be said, therefore, that -

relatively speaking - the United States is disadvantaged by having too many people and too little space.

Nor could it be said that the territory of the United States was poorly endowed with natural resources. On the contrary, in all human history no large territory has ever been opened up which has more excellent and wonderful resources, and, although much has been exploited and ruined since, this still remains true today.

All the same, the industrial system of the United States cannot subsist on internal resources alone and has therefore had to extend its tentacles right around the globe to secure its raw material supplies. For the 5·6 per cent of the world population which live in the United States require something of the order of forty per cent of the world's primary resources to keep going.

Whenever estimates are produced which relate to the next ten, twenty, or thirty years, the message that emerges is one of ever-increasing dependence of the United States economy on raw material and fuel supplies from outside the country. The National Petroleum Council, for instance, calculates that by 1985 the United States will have to cover fifty-seven percent of its total oil requirements from imports, which would then greatly exceed -- at 800

million tons - the total oil imports which Western Europe and Japan currently obtain from the Middle East and Africa.

An industrial system which uses forty per cent of the world's primary resources to supply less than six per cent of the world's population could be called efficient only if it obtained strikingly successful results in terms of human happiness, well-being, culture, peace, and harmony. I do not need to dwell on the fact that the American system fails to do this, or that there are not the slightest prospects that it could do so if only it achieved a higher rate of growth of production, associated, as it must be, with an even greater call upon the world's finite resources. Professor Waiter Heller, former Chairman of the US President's Council of Aluminium Economic Advisers, no doubt reflected the opinion of the most Chromium modern economists when he expressed this view:

'We need expansion to fulfil our nation's aspirations. In a fully employed, high-growth economy you have a better chance to free public and private resources to fight the battle of land, air, water and noise pollution than in a low-growth economy.

'I cannot conceive,' he says, 'a successful economy without growth.' But if the United States' economy cannot conceivably be successful without further rapid growth, and if that growth depends on being able to draw ever-increasing resources from the rest of the world, what about the other 94·4 per cent of mankind which are so far 'behind' America?

If a high-growth economy is needed to fight the battle against pollution, which itself appears to be the result of high growth, what hope is there of ever breaking out of this extraordinary circle? In any case, the question needs to be asked whether the earth's resources are likely to be adequate for the further development of an industrial system that consumes so much and accomplishes so little.

More and more voices are being heard today which claim that they are not.

Perhaps the most prominent among these voices is that of a study group at the Massachusetts Institute of Technology which produced
The Limits to
Growth,
a report for the Club of Rome's project on the predicament of mankind. The report contains, among other material, an interesting table which shows the known global reserves; the number of years known global reserves will last at current global consumption rates; the number of years known global reserves will last with consumption continuing to grow exponentially; and the number of years they could meet growing consumption if they were five times larger than they are currently known to be: all this for nineteen non-renewable natural resources of vital importance to industrial societies. Of particular interest is the last column of the table which shows 'US Consumption as % of World Total'. The figures are as follows:

Aluminium 42%

Chromium 19%

Coal 44%

Cobalt 32%

Copper 33%

Gold 26 %

Iron 28 %

Lead 25 %

Manganese 14%

Mercury 24 %

Molybdenum 40%

Natural Gas 63%

Nickel 38 %

Petroleum 33 %

Platinum Group 31%

Silver 26%

Tin 24%

Tungsten 22%

Zinc 26%

In only one or two of these commodities is US production sufficient to cover US consumption. Having calculated when, under certain assumptions, each of these commodities will be exhausted, the authors give their general conclusion, cautiously, as follows:

'Given present resource consumption rates and the projected increase in these rates, the great majority of the currently important non-renewable resources will be extremely costly 100 years from now.

In fact, they do not believe that very much time is left before modern industry, 'heavily dependent on a network of international agreements with the producing countries for the supply of raw materials' might be faced with crises of unheard-of proportions,

'Added to the difficult economic question of the fate of various industries as resource after resource becomes prohibitively expensive is the imponderable political question of the relationships between producer and consumer nations as the remaining resources become concentrated in more limited geographical areas. Recent nationalisation of South American mines and successful Middle Eastern pressures to raise oil prices suggest that the political question may arise long before the ultimate economic one,'

It was perhaps useful, but hardly essential, for the MIT group to make so many elaborate and hypothetical calculations. In the end, the group's conclusions derive from its assumptions, and it does not require more than a simple act of insight to realise that infinite growth of material consumption in a finite world is an impossibility. Nor does it require the study of large numbers of commodities, of trends, feedback loops, system dynamics, and so forth, to come to the conclusion that time is short. Maybe it was useful to employ a computer for obtaining results which any intelligent person can reach with the help of a few calculations on the back of an envelope, because the modern world believes in computers and masses of facts, and it abhors simplicity. But it is always dangerous and normally self-defeating to try and cast out devils by Beelzebub, the prince of the devils.

For the modern industrial system is not gravely threatened by possible scarcities and high prices of most of the materials to which the MIT study devotes such ponderous attention. Who could say how much of these commodities there might be in the crust of the earth; how much will be extracted, by ever more ingenious methods, before it is meaningful to talk of global exhaustion; how much might be won from the oceans; and how much might be recycled? Necessity is indeed the mother of invention, and the inventiveness of industry, marvellously supported by modem science, is unlikely to be easily defeated on these fronts.

It would have been better for the furtherance of insight if the MIT team had concentrated its analysis on the one material factor the availability of which is the precondition of all others and which cannot be recycled -

energy.

I have already alluded to the energy problem in some of the earlier chapters. It is impossible to get away from it. It is impossible to overemphasise its centrality. It might be said that energy is for the mechanical world what consciousness is for the human world. If energy fails, everything fails.

As long as there is enough primary energy - at tolerable prices - there is no reason to believe that bottlenecks in any other primary materials cannot be either broken or circumvented. On the other hand, a shortage of primary energy would mean that the demand for most other primary products would be so curtailed that a question of shortage with regard to them would be unlikely to arise.

Although these basic facts are perfectly obvious, they are not yet sufficiently appreciated. There is still a tendency, supported by the excessively quantitative orientation of modern economics, to treat the energy supply problem as just one problem alongside countless others - as indeed was done by the MIT team. The quantitative orientation is so bereft of qualitative understanding that even the quality of 'orders of magnitude'

ceases to be appreciated. And this, in fact, is one of the main causes of the lack of realism with which the energy supply prospects of modern industrial society are generally discussed. It is said, for instance, that 'coal is on the way out and will be replaced by oil', and when it is pointed out that this would mean the speedy exhaustion of all proved and expected (i.e. yet-to-be-discovered) oil reserves, it is blandly asserted that 'we are rapidly moving into the nuclear age', so that there is no need to worry about anything, least of all about the conservation of fossil fuel resources. Countless are the learned studies, produced by national and international agencies, committees, research institutes, and so forth, which purport to demonstrate, with a vast array of subtle calculation, that the demand for western European coal is declining and will continue to decline so quickly that the only problem is how to get rid of coal miners fast enough. Instead of looking at the total situation, which has been and still is highly predictable, the authors of these studies almost invariably look at innumerable constituent parts of the total situation, none of which is separately predictable, since the parts cannot be understood unless the whole is understood.

To give only one example, an elaborate study by the European Coal and Steel Community, undertaken in 1960-1, provided precise quantitative answers to virtually every question anyone might have wished to ask about fuel and energy in the Common Market countries up to 1975. I had occasion to review this report shortly after publication, and it may not be out of place to quote a few passages from this review':

‘It may seem astonishing enough that anyone should be able to predict the development of miners' wages and productivity in his own country fifteen years ahead: it is even more astonishing to find him predicting the prices and transatlantic freight rates of American coal. A certain quality of US coal, we are told, will cost "about $1450 per ton" free North Sea port in 1970, and "a little more" in 1975. "About $14·50." the report says, should be taken as meaning "anything between $13·75 and $15·25", a margin of uncertainty of $1.50 or - five per cent,' (In fact, the c.i.f.* price of US coal in European ports rose to between $24 and $25 per ton for new contracts concluded in October 1970!)