The myth of unlimited economic growth

The myth of unlimited economic growth

By Tomás Allan *

The title of this article is not due to a creation of mine but to the field of ecological economics. It refers particularly to the widespread idea that the economy grows at the expense of whatever is the only way to create well-being. Its designation as a "myth" responds to the fact that such a statement ignores two very important questions: the first, that it would be physically impossible for the third world to enjoy the living conditions of the first, since the Earth would collapse; that is, we would need several planets. The second (and closely related to the first), that the planet is finite, that is, it has resources that are depleted, with which goods and services cannot be produced unlimitedly, and today we have a rhythm of production and consumption that is difficult to sustain in the long-term.

The first world-third world dichotomy

The Spanish anthropologist and researcher Yayo Herrero comments in one of her conferences that the so-called developed countries long ago exhausted their raw material base and the material base that they have in their own territories. "If right now we put a fence around the periphery of these countries, and materials are not allowed in, energy is not allowed in and waste is not allowed to come out, those countries do not last fifteen minutes." And it continues "because they are countries that long ago exceeded the limits of their own territories." Rather, the level of consumption of most of these countries far exceeds their capacity in natural resources (although there are cases like Canada and Australia, which also have a very good base).

The United States and Canada, with 5.1% of the world's population, consume 21.5% of the planet's energy resources. These two plus Russia, Japan and fifteen European countries comprise 15% of the population, which consumes 43% of the total energy. While India, with 17.7% of the world's population, consumes just 5.1% of energy resources (source: Alberto Ríos Villacorta, European University of Madrid).

For the anthropologist, we have a first world that runs a "cannibalistic" economy, and a third world that functions as "a great mine and a great landfill." A first that needs the third not only to extract resources but also to throw away all the garbage produced by its citizens.

According to Herrero, if all the inhabitants of the world lived as the average of an Australian inhabitant, that is, in terms of the resources, minerals and energy it consumes, and the garbage it produces, it would take more than 4 planets. If everyone lived as the average of a Spanish citizen, more than 3. As an average American, more than 5, and as the average of an inhabitant of Kuwait ... more than 12. These are data that Greenpeace and the newspaper La Nation.

Following the line of arguments, it is possible to say that we cannot all be Australia, nor the United States, nor Spain. If there is not a significant displacement of wealth from developed to emerging countries and a significant modification in consumption patterns and levels, the achievement of having a whole world enjoying good standards of living is not seen as possible, especially taking into account that the world population is growing apace. Unless we create a couple more planets Earth. The development of alternative energy sources and other possible scientific advances also remain to be seen.

Once, in his famous book “The open veins of Latin America”, Eduardo Galeano wrote “the wealth of Europe cannot be understood without understanding the poverty of Latin America”. With that phenomenal narration of the wealth extraction model that was carried out during the colonial era, Galeano gives an account of how the fact of having been colonized, and our economic relations with the so-called first world, conditioned us from those times.

Well, I do not think I can affirm that the development of some finds its sole cause and simply in the underdevelopment of others, but there is an evident inequity in the use of resources, and a network of historical economic relations and geopolitical issues that play an important role, and that cannot be neglected when it comes to analysis.

To believers in Argentina's uniqueness: did it ever make a bit of noise to observe that not a single country in Latin America could develop? And what about Africa either? And that most of the central countries are the ones that played the role of colonizers, while the peripheral countries, in general, are the historically colonized? No, we Africans and Latin Americans do not have a gene that makes us more stupid and serial shit makers. Nor does it respond to the fact that on the other side there are superior and civilized beings that make possible the development that we lack.

Our history and our historical economic relations, without a doubt, condition us. They do not determine us, we are not condemned to failure, but they have conditioned us. As Daniel Schteingart told me: "It's like playing the trick with bad cards." Reformulating the phrase of the great Uruguayan writer: the living conditions of the first world cannot be understood without understanding those of the third.

Inequality as a central issue

With globalization, the world GDP began to grow faster. But at the same time inequality accelerated within them and among people on a global scale, without distinction of countries. In other words, it is produced more than before, but it is distributed increasingly worse. We grow at the cost of increasing inequality.

The Oxfam Intermón confederation of organizations (made up of 17 NGOs), which is dedicated to studying the subject, pointed out that in 2014, 80 people had the same wealth as the poorest half of the world's population (that is, the same as approximately 3,500 millions of people). In 2015, there were already 62 who had the same as half the world. In 2016, 8.

In addition, the 1,810 millionaires that appear in Forbes magazine (2016) have the same as 70% of the world's inhabitants. And another incredible fact: 10 companies had more income in 2016 than 180 countries combined. In addition, any CEO of any of the 100 richest companies earns more than 10,000 workers together in factories in Bangladesh.

The other important fact that concerns us is that in the last year developing countries lost, says Oxfam, more than $ 100 billion due to tax evasion by mostly foreign companies. In the case of Africa, it was 11,000 million dollars in 2010, equivalent to 6 times the amount needed to deal with Ebola (which was unleashed just years later) in Sierra Leone, Liberia and Guinea.

According to Thomas Piketty, inequality in the world is returning to 19th century levels. The French economist maintains that it grew until 1940, fell rapidly and intensely until the middle of that decade, then remained relatively stable until the 1980s and that is when it began to accelerate and become more acute to this day. The UN recognizes the problem and has it as one of the objectives to be solved for sustainable development in this century.

The illusion of unlimited growth in a limited space

There is one thing that is certain: poverty in the world has been going down for many decades. It did not stop its decline due to the increase in inequality, but for this a large growth of the economy is necessary (and this was the case until moments before the crisis of 2008). That is, the cake is enlarged, its portions are distributed very unevenly, but some people are still joining the snack (while many others continue to be left out). In other words, people will be able to get out of poverty even with these levels of inequality as long as the economy grows a lot, which brings with it a tremendous impact on the nature that sustains us, and in turn ignores the possibility of reducing it more rapidly from a better distribution and without wearing the environment in which we live.

Without wishing to be apocalyptic, but presenting the proper warnings: what will we do when we begin to feel truly limited in resources? Today the economy grows at the cost of a huge use of these, hand in hand with a huge amount of waste generation. That moment when water and other resources begin to become scarce may seem distant to us, but at this rate we are not only getting closer and faster but in the course of it we are also polluting. If we encounter this and our ability to create goods and services is limited and diminished, how will we continue to lower poverty if we do not distribute wealth better?

The UN and organizations like Greenpeace already express their concern about the deterioration of the environment. In fact, the highest international body has made the care of forests another of the objectives for sustainable development of our century, prior to releasing the data that every year 13 million hectares of forest disappear in the world.

It is therefore essential to begin to envision this problem as something that may arise in the future, perhaps not so distant. Begin to give rise to the idea that the margin to enlarge the cake is probably reduced and it is then time to distribute your portions better. Although all this does not take away from the current urgency to do so, and also adds to the need to deepen the use of renewable energies and to promote greater and better care of the environment.

Thus, inter-country inequality and global inequality seem to be two points to be attacked (and the reasons do not end with those mentioned here). But also, is it true that it is a necessary cost to pay in order to achieve general well-being? Is it not possible to grow less, take better care of the environment and distribute better?

* for Ink / Photographs:

July 3, 2017

Source: La Tinta

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