Wednesday, November 15, 2006

Sustainable Development

Sustainable Development

The neo-classical view of economics is based on the idea that people are opportunistic and within the rule of law, will take advantage of anyone they can to get ahead in life.  This view of people has been forwarded by John Locke all the way up to Milton Friedman.  

This view extends beyond how people treat each other to how people treat the world they live in.  Natural resources are provided for human consumption and profit.  The more resources a person is able to harvest the richer that person will be.  

With the challenge of global warming and coming to the end of seemingly limitless resources the economy has been placed in a dichotomy with the planet.  In Al Gore’s movie The Inconvenient Truth there was a picture of a scale and on one side were gold bars and on the other side was the planet.  The message being that we can either have the planet or profits.  An even deeper seated meaning is that there is no profit without the planet.  In either case there are finite resources and the race is on to see who can claim most of the wealth that the world has to offer.  However, the race to convert limited resources into profit in the present without any concern for future generations is recast in management literature with different language as the fiduciary duty of managers to increase shareholder value by adding value to natural resources.    

Western style capitalism was critiqued by the Frankfurt School (1980s).  Led by Andre Gunder Frank (1980, 1996) and Immanuel Wallerstein, World Systems Theory (1982, 2004) uses the metaphor of the core and the periphery to describe how natural resources are drawn from the ‘hinterland’ to support the growth of the metropolis.  Harrold Adams Innis (1930) developed this theory in the Canadian context of the fur trade showing how furs were taken from Canada to support the growth of England.  

The colonial slave trader provides an interesting case study to explain world systems theory:
A British ship sails from England with guns and other finished products. Once they reached the African coast they used the guns to trade for slaves.  The newly acquired guns were then used to round up more slaves.  While more independent nations were enslaved the British ship was full of slaves and making its way to the Caribbean and North America.  Once there they sold those that had survived the voyage for cotton or other raw resources.  These resources were largely harvested by the slaves that fueled the trade.  The slave traders then returned home with raw materials to support the growing production capacity of Europe.  

This story has many variations all over the colonial world, in India, China and wherever else the quest for raw materials and markets led the ‘explorers.’

This story has also been given a modern interpretation.  

The marketing intern sits in his cubicle in the Las Angels head office thinking up what value or idea Nike or Coke will represent for this fiscal year.  He comes up with just do it, and it is good.  He writes a memo to his boss who books a meeting with the designers who try and capture motivation and decisive action in the lines of a shoe.  These designers and advertisers sell the idea that what people lack in their lives (motivation and decisive action) can be fulfilled by these products.  This emotional promise is exported across the world.  When it comes time to sell shoes the actual shoe is worth about ten dollars (most of which is shipping) and the other one hundred dollars goes to the emotional promise (branding).  

The marketing executive doesn’t care who buys the emotional lie, as long as sales go up.  Even if it is a guy living downtown who can barely make the rent but has to spend a thousand dollars on a jacket.  Not to mention the harm to society when people start chasing emotional fixes through their debit card.  

What these two stories show is that western capitalism is a feverish search for more profit and more consumer goods.  Growth is the supreme good.  Quality of life must always improve.  The problem is that humanity is reaching the limits of its growth.  Within ten to fifteen years the world supply of oil will peak essentially ending economic globalization.  That is not to mention green house gasses that are causing global warming.  

Enter Sustainable Development.  Sustainable development recognizes the limits of the earth and uses those resources in a way that meets the needs of the present generation without compromising the needs of future generations to meet their own needs (WCED, 1987).  

The first problem is that the needs of the present generation are not being met.  There are 3 billion people that live on less than 2$ a day.  These people have to deficit spend their natural and economic capital just to survive.  Second, the needs of tomorrow will not be met.  This situation is caused by the need for endless growth and accumulation.  People that do ‘have’ will never ‘have’ enough.  

Sustainable development is a culture change.  My hope is that it will be a corrective measure to the endless accumulation that will kill not only western culture but humanity.  

No comments: