Uneconomic growth

Growth is uneconomic when it increases environmental and social costs by more than it increases production benefits. The cost associated with economic growth arises as a result of  the social and environmental sacrifices made necessary by that growing encroachment on the eco-system. David Suzuki argued that ecologies can sustain 1.5-3% of economic growth per year and any higher growth will necessarily cannibalize the natural capital of soil or forest. But when growth becomes uneconomic we must find new answers to these problems. 

• Historically economic growth was the answer given to the major problems raised by Malthus (overpopulation), Marx (unjust distribution), and Keynes (unemployment).
• Globalization is the current ideological commitment to global economic integration via free trade and free capital mobility. Consequently many tractable national problems like overpopulation, unjust distribution, and unemployment, are converted into one intractable global problem, in the name of “free trade,” and in the interests of transnational capital.
• Growth in GNP is so favored by economists that they call it economic growth. GNP is supposed to grow forever. There are costs incurred by GNP growth. These costs are depletion, pollution, ecological disruption, sacrifice of leisure time, disutility of some kinds of labor, destruction of community in the interests of capital mobility, takeover of habitat of other species, and running down a critical part of the inheritance of future generations.
• The law of diminishing marginal utility of income tells us that we satisfy our most pressing wants first, and that each additional unit of income is dedicated to the satisfaction of a less pressing want. So the marginal benefit of growth declines. 
• The law of increasing marginal costs tells us that we first make use of the most productive and accessible factors of production and only use the less productive factors as growth makes it necessary. Consequently, marginal costs increase with growth. 
• When rising marginal costs equal falling marginal benefits then we are at the optimal level of GNP, and further growth would be uneconomic.
• The only limit to economic growth is technology, and there is no limit to technology, ergo no limit to economic growth. Therefore the very notion of “uneconomic growth” makes no sense. Growth does not increase the scarcity of anything, rather it diminishes the scarcity of everything! How can one possibly oppose growth? 
• Growth that relies entirely on exploiting increased knowledge rather than exploiting increased resource consumption may not qualify as uneconomic growth.
• Economists agree that GNP was not designed to be a measure of welfare; it measures only activity. Nevertheless they assume that welfare is positively correlated with activity, so that increasing GNP will increase welfare. This is equivalent to believing that the marginal benefit of GNP growth is greater than the marginal cost. The empirical test results turn out not to support the belief.
• Measures of welfare are difficult and subject to many arbitrary judgments. The empirical evidence that GNP growth has increased welfare is weak. Impact on welfare via policies that increase GNP growth are weak and nonexistent. 
• Economists habitually argue that we need not worry about global warming because the only climate-sensitive sector of the economy is agriculture, and agriculture accounts for only 3% of GNP. These economists evidently don’t need to eat! 
• Overpopulation would be cured by the demographic transition. When GNP per capita reaches a certain level children become too expensive in terms of other goods forgone and the birth rate automatically falls. Is it necessary for Indian per capita consumption to rise to the Swedish level for Indian fertility to fall to the Swedish level, and if so what happens to the Indian ecosystem as a result of that level of total consumption?
• Unjust distribution of wealth between classes would be rendered tolerable by growth, the rising tide that lifts all boats, to recall another slogan. Yet growth has in fact increased inequality both within and among nations. To make matters worse, even the metaphor is wrong, since a rising tide in one part of the world implies an ebbing tide somewhere else.
• The assumption that growth is economic, that it is making us richer rather than poorer. But now growth is becoming uneconomic. Uneconomic growth will not sustain the demographic transition and cure overpopulation. Neither will it help redress unjust distribution, nor cure unemployment. Nor will it provide extra wealth to be devoted to environmental repair and clean-up. Indirect growth based solutions to the big problems no longer work.
• We now need more direct and radical solutions to the problems of Malthus, Marx, and Keynes: population control to deal with overpopulation; redistribution to deal with excessive inequality; and measures such as a public employer of last resort, and ecological tax reform to raise resource prices relative to labor. These must be national policies. Many nations have made progress in controlling their population growth, in limiting domestic income inequality, and in reducing unemployment. 
• Global economic integration by free trade and free capital mobility effectively erases the policy significance of national boundaries. Nations can no longer internalize environmental and social costs in the interests of resource efficiency and social justice, because capital is free to produce elsewhere and still sell its product in the market whose social controls it just escaped. Capital escapes higher wages and taxes of any kind, in particular taxes aimed at re-distributive policies that redress excessive inequality and poverty.
• Globalization refers to global economic integration of many formerly national economies into one global economy, mainly by free trade and free capital mobility, but also by easy or uncontrolled migration.
• Whether capital moves to overpopulated low-wage countries, or poor workers move to the high-wage country, the result is the same -- a competitive bidding down of wages to the detriment of countries that have followed a high-wage policy by limiting their numbers and by more equally distributing their wealth.
• The laboring class in the low-wage country gains in terms of number employed, though not usually in terms of increased wages because of the virtually unlimited supply of cheap labor resulting from past and present demographic growth. The capitalist class in the high-wage country gains from lower wage costs at home as well as abroad. 
• The big losers are workers in the high-wage countries. With low wages now a competitive advantage in attracting capital, we might expect policies aimed at increasing the supply of labor in previously high-wage countries.
• Globalization operates by standards-lowering competition to bid down wages, to externalize environmental costs, and reduce social overhead charges for welfare, education, and other public goods. It is far worse than an unrealistic global dream -- it actively undercuts the ability of nations to continue to deal with their own problems of overpopulation, unjust distribution, unemployment, and external costs. It converts many relatively tractable national problems into a single intractable global problem.

Globalization via export-led growth is the new philosopher’s stone of the IMF-IBRD-WTO alchemists. Nations can all turn their lead into gold by free trade. With the revival of alchemy comes a return to the logic of Mercantilism: wealth is gold, and the way for countries without mines to get gold is to export more goods than they import, and receive payment for the difference in gold -- the alchemy of trade. The way to export more than you import is to reduce wages, and to externalize social and environmental costs, because that keeps prices of your exports competitive. Low wages also prevent your laboring class majority from buying imported goods and thereby dissipating the trade surplus. The way to keep wages low is to have an oversupply of labor. An oversupply of labor can be attained by easy immigration and high birth rates among the working class. Globalization requires, therefore, that for a nation to be rich, the working-class majority of its citizens must be poor, increase in number, and live in a deteriorating environment! Behind these absurdities is the further contradiction that under globalization it no longer makes sense to speak of  “nations” (only corporations); nor of “citizens” (only employees).

Globalization is accelerating the shift to an era of uneconomic growth, a time when, as John Ruskin foresaw, “That which seems to be wealth may in verity be only the gilded index of far-reaching ruin.”

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Disaster and human history

Case Studies in Nature, Society and Catastrophe
By Benjamin Reilly

• The present rate of technological advance is unprecedented in human history.
• Modern college students believe that the study of our historical past has little meaning to their present lives.
• World population has doubled between 1960's and early years of 21st century. Population density have also reached unseen levels. 
• The percentage of world's surface covered by urban areas jumped from 0.1% to 1.0% between 1900 and 1990 and if the trend continues more people will be living in urban than rural areas.
• Human beings are increasingly concentrated in "megacities", sprawling urban areas with millions of residents. The trend has slowed down in developed world but continues unchecked in the developing world. 
• The parallel explosion of technological and demographic growth in the modern age is not accidental but are intimately linked. These two are complimentary processes and unfortunately linked to unprecedented natural resource depletion. The planet is now losing 120,000 sq.km. of forest every year to logging, herding and agriculture. As a result of human intrusion into forest ecosystems, deadly epidemics may just be a taste of things to come.
• Deforestation is linked to soil erosion. Soil is created very slowly by nature but can quickly be destroyed by human agriculturists employing unsustainable farming practices.
• Modern farmers are "skinning our planet" reducing earth's soil deposits by 4 tons per head due to increasing exploitation of hillsides and prairies by land hungry farmers in developing nations. 
• Mechanized farming renders soil susceptible to erosion. Although soil erosion is not a new problem in human history, the present rate of global soil loss is unprecedented. Mankind is currently stripping soil at 20 times the natural erosion rate, a process that is likely to have catastrophic impact in future.
• The current rate of technological and demographic advance has also endangered world supply of water, which is the most vita natural resource. Human population pressure - large parts of the world are now in real danger of exceeding available water sources not only in low rainfall years but also during normal years. 
• As of 2008, 35% of the world's renewable freshwater is already diverted from ecosystem for human use, mostly in agriculture which requires enormous water inputs. In arid countries like Egypt & Israel this statistic is 100% further undermining stability of already volatile region. 
• Qatar is "mining" their water sources, withdrawing more water from the ecosystem than is replaced by natural sources, 6 times as much as is replenished by natural processes. In UAE it is 17 times annual replenishment.
• So far, human being had some successes in staving off looming water crisis, through technology, tapping underground aquifers, piped transportation of river water etc. Water poor countries have sustained by importing "virtual water" in the form of food. [Production of one kg rice requires as much as 2,000 liters of irrigation water.] World's largest exporter of "virtual water" is USA which ships out billions of liters in the form of grain allowing importing nations to support higher populations than they could with limited domestic water supplies. None of these techniques will cope with increasing global population in long run.  Desalinization is expensive, rivers have limited capacity, and aquifers that are drained faster will disappear. Already some of the world's great rivers some times run dry before reaching the sea due to escalating demands on their water.
• Virtual water in inextricably tied to the prices of petroleum, another finite source. The price of virtual water is tied to transportation fuel costs. Food and fuel are increasingly becoming interchangeable commodities, and nations depending on "virtual water" for their water needs, therefore are courting disaster.
• Deforestation and road building has reduced the soils ability to absorb rainfall, lowering replenishment rate of aquifers. Industrial pollutants have made some of the fresh water sources unusable by humans. 
• Global warming due to anthropogenic greenhouse gas emissions will likely wreck havoc with the world's water supply. When the already retreading glaciers vanish, many rivers will flow more intermittently. 
• Global warming will likely result less "average" rainfall and more extreme weather conditions, such as downpours leading to floods & soil erosion, dry spells and drought. Higher temperatures will increase evaporation rates, reduce agriculture production even if local rainfall is technically higher. Scientific understanding of global warming remains incomplete. 
• The fossil fuels consumed between 1751-1998 were equivalent to the amount of sunlight that the world's plants captured in preceding 13,300 years. This energy fueled mankind's advancement from agriculture to industrial and then to technological age. but released thousands of years buried carbon dioxide into atmosphere.
• The result is the certainty of environmental change in next few hundred years. But human species is not well suited to rapid environmental fluctuations.
• It remains to be seen if the rapid medical advances the humans achieved in the 20th century will be able to keep up with new epidemic diseases that arise during 21st century.
• The disasters of the future might look different from the disasters of the past.
• Earthquakes and volcanoes will occur like in the past but human population growth in general and megacities in particular will magnify their effects. Other disasters will change more dramatically in future.
• Population pressure, changing climate will produce unprecedented levels of deforestation, desertification, soil erosion and consequent famine. In the age of soaring food prices, declining water availability famine may become endemic in some parts of the world,  no longer checked by cheap transportation of large food supplies that curbed famines in the late 20th century.
• Tropical cyclones may become more violent in future, though science is uncertain. 
• Finally, unprecedented population density, near instantaneous modern transportation and rapidly changing environment will create host of new opportunities for infectious diseases.
• Advances in technology might ameliorate these supercharged modern disasters. But will certainly create new disasters in future.
• As mankind's need for more energy continues to increase, fossil fuel reserves continue to dwindle and CO2 continues to accumulate in the atmosphere pressure will build on humanity to exploit nuclear power for its energy needs. Nuclear power has worst reputation as a safe, clean energy source.
• It is somewhat disquieting to note that a seemingly technological advance could have led to an environmental nightmare.
• It is clear that different types of natural disasters are intimately linked and are created or badly exacerbated by human agency. In particular, global warming may play the role as "master disaster" of the post 20th century influencing almost every other type of natural disaster.
• Rising global temperatures may lead to tropical cyclone activity and more frequent El Nino events and spread of tropical diseases. Rising sea levels will swallow coastal agricultural land and concentrate more people in squalid megacities heightening vulnerability to diseases.
• Poverty bred by global warming worsen even terrestrial disasters since poverty plays a crucial role in determining the vulnerability of human beings to natural disasters. Global warming may precipitate worst famine as rising human population run headlong into declining agricultural activity. The result may be a new Malthusian crisis on a regional or even a global scale.
• Human beings, especially those living in capitalist economies tend to make choices favoring short term gains and comforts rather than long term sustainability and stability thus making disastrous choices. We continue to build suburbs on fault lines, construct vacation homes on storm swept coastlines or volcano slopes, inundate poorly drained fields with river water leading to soil salinization. 
• In an age, where population control provides surest means of mitigating future disasters, the worlds wealthiest refuses to fund programs that offer birth control for fear of offending certain social groups. Most damaging of all, human beings are still slow to make sacrifices in short term that might mitigate the environmental damage of global warming in the long run.
• As a society, we have faith that the technologies of tomorrow will diffuse future disasters that we are creating by our actions today.

Development could be defined as the essence of general transformation and 

destruction of the natural environment and of social relations in order to 

increase the production of commodities (goods and services) geared, 

by means of market exchange, to effective demand. 

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The technological progress has been bringing us with environmental issues and problems of pollution and global warming along with advancements that made our lives easier, more efficient and our bodies healthier. There is no alternative to reduce population, preserve ecological assets, minimize emissions & pollutants,  reduce water wastage and start living closer to nature. Plastics and fossil fuel usage must be brought down 10% every year. Nothing should be allowed at the expense of environment. The so-called sustainable practices etc only postpones doomsday.

Technology is not the solution to poverty

You might think that technology is the solution to poverty – but here’s why you’re wrong.

• Technologies created and sold by big business will be rolled out by Technology creators in place of real solutions to global inequality.
• 62 people have more wealth than the bottom half of the world’s population. 
• In the USA and Europe, large sections of the population have no faith at all in the institutions that govern society.
• The world’s richest man i.e. Bill Gates can’t give his money away fast enough, quite literally, because his wealth grows by multiple billions of dollars every year, a symptom of an economic system skewed to the interests of the very richest.
• Technology allows us to grow more food, to slow down climate change, to provide all of our energy needs, to end all of our suffering. 
• It does not challenge the status quo i.e. rich will remain richer and poor will remain poorer. 
• Who wants to question Bill Gates's statement a year ago that, if we just keep going “there will be almost no poor countries by 2035”.
• Yet to be invested technologies can theoretically provide abundance for all.
• The power of the 1 per cent rich actually means that, all things being equal, those technologies will simply reinforce that power. 
• Gates foundation is the biggest funder of research into genetic modification in the world. Gates pushes intensive farming methods involving plenty of chemicals and privatization of seed distribution. Time and again, these ‘solutions’ have proved disastrous for small farmers, allowing big players to effectively control the whole food system. They also ramp up global carbon emissions and fuel global warming.
• The cult of technology is useful for the world’s most powerful people. But if the rest of us are really interested in creating a better world, we need to look beyond the words of Bill Gates and challenge his power. 

My View:
Technology alone will never solve our problems like poverty, illiteracy, unemployment, corruption etc. At best Technology can improve what we are good at. If we are honest we will improve our honesty. If we are rogues we will improve our roguishness etc. 

What we need to do is focus on (1) education and ethical education. (2) population control which minimizes or nullifies the impact of our development. (3) elimination of corruption especially in public domain etc, over a period of time. 

Export oriented economic development has its own pitfalls. We should focus on developing what we are good at to become self sufficient in all segments and earn enough through exports to meet the needs of petroleum products import, only to maintain trade account balances every year.

In any good system, middle class should expand and poor class should shrink. Otherwise progress is meaning less. At the same time rich class should be monitored for their undesirable practices of amassing wealth and must be controlled.