Sustainable Development Is it Really

Sustainable Development

Is it really required?

The world is naturally stable, and there is little that we can do to enhance stability regardless of which policies we pursue. This paper will argue that concerns about warming, resource depletion, global poverty and starvation are generally self-correcting and a natural part of progress. This contention runs counter to the broad consensus in OECD countries, but deserves a further consideration.

We live in a very short span of time in geological and even biological terms. In order to add some perspective to this paper, the author will include two earlier predictions: those of the Club of Rome in 1972, and those of Thomas Malthus (1766-1834). In addition, the economic thought of two economists will be cited, including Karl Marx (1818-1883) and Milton Friedman (1912-2006).

Malthusians and Marxists: Commonalities of Thought

Thomas Malthus and Karl Marx started from a similar presumption: the resources of the world were essentially constant. In Thomas Malthus' most famous work, an Essay on the Principle of Population (1798), Malthus predicted that the population would grow while food supply remained constant, thus leading to starvation (Malthus 1798).

Marx's thinking was similarly influenced by scarcity. He was a disciple of the French economist, Say, who through "Say's Law" (Hollander 2005) postulated that demand was driven by the supply of goods. Since, the supply of goods was limited, and the population was increasing, it was clear to Say that there were winners and losers as the global resource pie was being divvied up and passed around.

Marx took Say one step further, to say that there are those who produce things -- the laborers -- and those who live off the work of the producers -- the capitalists. It was clear to Marx which party was getting more, and which party was deserving of more.

Gaps in Malthus and Marxist Ideology

Both Malthus and Marx (and by extension, Say) missed an important concept: progress. Progress in the form of innovation created a bigger pie. Innovation is more than new product ideas. It can be quite diverse; for example:

The aforementioned discovery of the potato in South America. This introduction to the UK agricultural scene during the 1700's created an explosion of agricultural productivity, which resulted in many more calories per acre being produced with fewer laborers. The resultant capital and labor freed up due to the potato was a major contributor to the Industrial Revolution (Duchesne 2004).

The major changes in overall productivity wrought by the Industrial Revolution: As a result of automation, innovation in manufacturing, and better logistics, the world's wealth -- and wealth per capita -- rose dramatically faster than population.

The improvements in well-being due to trade and comparative advantage. As the world lost its mercantilist policies and pursued freer trade (evident even in the time of Malthus and Marx), the world's inhabitants became richer. (Economist 2007).

Modern Malthusians and Marxists: The Club of Rome

The Club of Rome produced a book in 1972 called "The Limits to Growth. (Meadows 1972). This book famously predicted that the world would fall to pestilence and famine, as the amount of resources used would climb exponentially with the population explosion

Simply put, the Club of Rome was wrong. Since 1972, population has indeed carried on rapid growth, but per-capita incomes have risen even faster. From 1972, when China and India could not feed their populations, both have become food exporters. The Club of Rome made the same mistake as their "limited world" predecessors, Malthus and Marx. They thought of people as reactive automatons, unable to change their behavior or their consumption. The Club of Rome should have known better. The "Green Revolution," which increased the world's production per acre of grains by a factor of five, had started in the 1960's. The Chinese peasant, allowed to farm 1/2 acre and sell his produce since 1965, had increased overall Chinese food production by 30% by 1972.

The Reality: Resources are Expanding

It seems illogical, or nearly paradoxical, that as we use more resources, our resource pool keeps growing, but that is in fact the case. This is true for three reasons:

New methods of finding and extracting resources (ore, oil, gas, other) have allowed us to increase the amount of reserves substantially-to the point where we have more global reserves of most important minerals and energy today than we did in 1972.

We have become more efficient in what we produce, partly due to the increase in the price of resources.

Our economy has changed in the developed world. For example, a ton of steel and an Intel computer chip sells for about the same number of dollars: we're producing a lot more chips and a lot less steel than we used to in OECD countries. Since a chip only requires a few grains of sand, the world's resources are preserved.