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Excerpts from Chapter XIV of the book Global Development:
Conclusions
The need for sustainable developmentThe goal of sustainable development is to have all human beings, including future generations, live their lives in health and freedom, with access to everything that's needed to fully develop their physical and mental potential. To achieve this, a number of problems must be overcome. Let's review them briefly.
At present, society is moving away from rather than closer to sustainable development. In the rich countries, more and more people enter the ranks of the poor. Lower and middle income groups work harder and produce more, but don't get rewarded for it. Due to the cost cutting efforts of business and government, everyone faces growing economic insecurity: jobs that are here today may be gone tomorrow.
In the poor countries, one third of the population - one fifth of humanity - is so desperately poor that life is a day-to-day struggle for survival. A group at least as big lives just above that level. Their number increases daily, mostly due to rapid population growth.
Basic conditions for escaping poverty are health and education. Worldwide, the poor and the lower income groups depend on governments to provide these. Yet due to the efforts to cut budget deficits, debts and the role of government, the quality of and access to such services is reduced. Consequently, the living standards of billions of people are in decline, and their chances to better themselves diminished.
In the future, the problem of declining living standards is likely to be worsened by environmental degradation. Today, environmental problems already affect the health and livelihoods of hundreds of millions, especially in the poor countries. If drastic steps are not taken, in the coming century billions will suffer the consequences of pollution and scarcity of natural resources - including agricultural land and water.
Current economic developments and policies contribute to the above processes. The worldwide opening up of economies has led to cut-throat competition in the marketplace. Technological development, fueled by the need to cut production costs, leads to rapid productivity growth. At the same time, demand stagnates due to rising unemployment, declining real wages and cutbacks in government investment. The economy is caught in a vicious circle, marked by a growing gap between productivity and demand. We're going towards a situation in which the demand for goods and services can be supplied with only a fraction of the labor available in the world today. That means that, from an economic point of view, a large part of the global work force is or will soon become superfluous.
The problem of development, therefore, is more social than economic. The solution is not, as economists and most politicians claim, to maximize economic growth by meeting demand in the most efficient way. Rather, it is to generate development that enables all people to make a decent living, in ways that guarantee that future generations can do the same.
The starting point for giving people, all people, the chance to partake successfully in the economy is to make good quality education and health care available to all. Second, especially in the poor countries and the impoverished parts of the rich nations, huge investments will have to be made in social and economic infrastructure. Simultaneously, to ensure acceptable living conditions for future generations, we need to rationalize our use of finite natural resources. To do so, we have to control pollution, make adequate use of land and water, and convert to renewable energy. Again, vast investments are needed.
Unfortunately, present economic dogma and policies obstruct these investments. The key problem is that the above needs are not backed up by economic demand, that is, the capacity to pay. Without this capacity, the productive potential of the private sector cannot be used to supply the required goods and services. It is the State which, as guardian of the common good, should assume the responsibility to satisfy people's basic needs when they're incapable of doing so themselves. Yet bad government, resulting in the misspending of funds and towering debts, has led to a drive to reduce the role of the State in society as much as possible. Consequently, its capacity to invest in sustainable development is declining rather than growing.
Whereas the lower-income groups face increasing poverty and economic stagnation, the top layers of society are appropriating ever more of its wealth. This accumulation of capital leads to large scale speculation. Unavoidably, this will be followed, at some point in time, by a financial and economic collapse. Those hardest hit will be, as usual, the less well-off. Moreover, the State's capacity to invest in sustainable development will be reduced even further.
The key to resolving these problems is to convert the needs of humanity into demand. The only institution that can do so is the State. If it does it in the right way, it can create economic growth that is both socially equitable and environmentally sustainable. We've seen how part of the money needed for sustainable development can be raised by reversing some of the flows of riches that go to the wealthy. Higher taxes on high incomes, on capital transactions and on capital gains would be one option. Reducing the possibilities for tax avoidance, coming down hard on tax evasion, and the confiscation of any illegally obtained wealth, property and profits should be complementary measures.
Sustainable development should also be financed through the taxation of non-sustainable economic activities, including the use of non-renewable energy. Government bureaucracies should be downsized; moreover, in most countries the armed forces should be abolished. Different ways of budgeting and the elimination of subsidies that funnel support to those who don't need it would also generate huge savings and thus, more funding for sustainable development.
The above measures would yield hundreds of billions of dollars each year. The cost of a full program for sustainable development would, however, require even more funds. These should be raised through conditioned money creation. This would be possible without causing inflation, as long as total demand for goods and services would not exceed the global economy's production capacity.
If adequately handled, money creation would lead not only to sustained economic growth, but also bridge the growing gap between productivity and demand. Moreover, it would put an end to today's addiction to deficit financing and could wean private investors from the international speculative circuit, by offering them new investment opportunities.
The measures proposed in this book require a radical change in economic and political thought. This change will not be easy, because the short term interests of many of today's political and economic power holders will suffer. Yet even for them, the alternative presented in this book would, in the longer run, be beneficial.
The strongest argument for gaining support for sustainable development is its importance for future generations. People are concerned not only about their own well-being, but also about that of their offspring. Even for the rich this should provide an incentive to try and do something about the problems we face. For this incentive to work, however, it is necessary that people become aware of the problems. For those who already support the idea of sustainable development, the challenge is to raise this awareness with others.
People should come to realize that we're all in this together: that the main problems we face are of a global nature. Economic and environmental problems as well as most social and political issues can only be solved through international cooperation. Futurist Marshall McLuhan coined the phrase "global village" to indicate that with modern technology, people all over the world will be able to communicate as easily as if they were neighbors. His prophecy has already come true. Yet how many people will get citizenship in this global village and gain access to all its amenities? The question is not a lack of production capacity: in principle, in a few decades, everyone could be hooked up to the international communication network. The problem is that people lack the money to convert their need into demand. As things are going, McLuhan's vision will involve only a privileged minority - of millions, not of billions.
The concept of a global village demonstrates that the need for sustainable development is worldwide: that we're all in this together. To extend the "village" metaphor, we can see the world’s regions as extended families - fathers and mothers, aunts and uncles, sisters, brothers and cousins, all living together in compounds. A few of these extended families are rich, with most family members leading a life in various degrees of luxury. Some are relatively poor: although they don't starve, they are unable to afford many of the things their better-off family members have come to take for granted.
For the other extended families, who make up the majority of the village, poverty is much more pervasive and acute. More than half the members, including most of the children, live in deprivation; some are actually on the brink of starvation. Many children do not go to school or receive medical care because ostensibly, the family lacks the money to pay for it. Yet the heads of these families live in an opulence which in some cases, surpasses that of the rich members of the rich families.
Part of this opulence comes from loans that the heads of the rich families gave to those of the poor. This money was supposed to be spent to improve the poor families’ compounds. But the heads of the poor families pocketed most of it, thus enriching themselves. Still the loans have to be paid back - with interest. The money to do so comes not out of the well-filled pockets of the family heads, but from the overall budgets of the poor families. Consequently, the poorest family members have even less food and money than before. The kids can't go to school; when someone falls ill, there's no money for the doctor. The house is in a shambles, piping and wiring are derelict or wrecked. Children fall ill and die. Only the part of the house where the family heads live is in good shape. Having all the amenities, they're not affected by, and appear to have little interest in, the worsening conditions in the rest of the compound.
Assume that we are members of one of the few rich families. What would we do in such a situation? We'd help the poor family members to at least send the children to school and, in case they'd fall ill, to pay for the doctor. Also, we might assist them in getting clean water, cleaning up their garbage and fixing their sewers, so their kids wouldn't fall ill so easily. That would not be totally altruistic, as the stench of their waste sometimes bothers us. We might even lend the poor neighbors some money to help them set up a small business.
All this would not really cost us a whole lot - say, 1 or 2% of our income. We could do it without eating a calorie less. We might have to cut down on a few luxury items and we might buy our new car a year later.
Why would we feel this urge to help? We would feel a moral obligation, strengthened by the fact that our family would be partly to blame for the poor families' predicament. In particular, we would feel guilty about our neighbors having to suffer for not paying off a loan which they didn't borrow and from which they never saw any benefits.
More parallels can be drawn. Assume that our destitute neighbors have a grove of trees in their farmyard, with a brook that provides both them and us with water. Since we razed our trees a long time ago, theirs are also important to us. Unfortunately, out of sheer need they are rapidly cutting them down, as the wood is one of the few things they can sell for a reasonable price. We know that the trees are essential for the entire neighborhood - yet some of our family are in fact the biggest buyers of the wood and thus promote the trees' destruction.
Moreover, assume that because of their poverty and lack of opportunity, some poor neighbors are regularly at our door to ask for work. As they become increasingly destitute, they come over more and more often. They even try to get in without asking. It's getting so bad we're thinking of fencing ourselves in completely.
On the other hand, if we can help them protect their trees and plant some new ones, we're all better off. If we help them raise their incomes they'll come to a store we own to buy the products we sell. That way, we'll also be better off.
Unfortunately, those who run our financial affairs claim there is not enough money to help our poverty ridden neighbors - we can't even help their kids. And to a certain extent, they're right. After all, all of us are on top of them if they reduce our household’s budget and say we'll have to wait another year for a new car.
So much for analogies. The point is that for the better-off in our world, the fight against poverty and environmental degradation has two imperatives. One is self-interest: if they don't, they'll suffer the consequences as well. The other is moral: as human beings, we have a responsibility to help others who are in need - especially if we, or at least those who represent us, are partly responsible for their misery. Both imperatives call for people to broaden their perspective: from their family, ethnic group, their region and nation, to humanity as a whole. Technology has made it possible for us to become aware of events all over the world, and to communicate with each other, worldwide, in a matter of seconds. Now, technological progress should be paired with moral progress. The rich should be willing to contribute some of their wealth for investment for the benefit of all. Moreover, those less well-off should be supported, materially as well as politically, in their struggle against those who exploit, repress or, in the best of cases, ignore them. The ruling cliques who do so have in many instances been created and supported by the democratically chosen leaders of the rich nations. Both the former and the latter should be held accountable by voters and made to change their policies.
Investment in worldwide sustainable development will require some sacrifice, but the benefits will be huge. Politicians should focus on convincing the public of the need to make those investments. Conversely, voters must require their leaders to end the parochial defending of short term interests, to correct past mistakes and to start addressing the real needs of society.
Denial of the problems we face is a major obstacle to change. Such denial is particularly prevalent among a small but highly visible group of opinion leaders and politicians who have a strong influence on public opinion. Politicians tend to downplay society's problems - unless they can gain votes by blaming problems on the opposition. That is because voters like to hear optimism: the idea that a beautiful future lies ahead, and the promise that such a future can be attained by voting for the right candidate. Since politicians need votes they may, to a certain extent, be excused for saying what their constituencies want to hear.
There is, however, no reason why other opinion leaders should deny society’s problems. Yet many economists, columnists, journalists and other pundits keep on telling us that things are going well, except for a few glitches which will sort themselves out. This playing down of current problems and even more, of the dangers that lie ahead, is a prime cause of the failure to take effective action. Supported by mainstream economic thought, which claims free trade, a tight money supply, deregulation and balanced budgets will resolve all economic problems, it becomes the most formidable obstacle to investment for sustainable development.
This obstacle must, and can be overcome. Awareness of the problems, concern for one's offspring and empathy for those who are less well-off should motivate those who can afford it to push for investment in sustainable development. Tangible proof that such investment yields results will increase the willingness to contribute. On the other hand, the longer we wait with investing, the more difficult and costly it will be to remedy the problems we face.
We're at a crossroads. The present holders of political and economic power, supported by most of the middle class, can stick to the present path. They can continue to seize and consume an ever larger part of the world's resources, while environmental degradation and poverty increase. Alternatively, the well-off can choose, or be forced, to change present policies and invest in sustainable development. Starting the process of sustainable development requires a joint effort of citizenry and leadership. In normal times, such a collective effort is difficult to generate, particularly in a democracy. The different groups and individuals that make up society pursue their own agendas, which may or may not conflict with those of others. In special situations, however, it is possible to focus these energies into a single, unified force. For this to happen the leadership and a sizeable majority of the population must strongly agree on the need to achieve a clearly defined goal. Also, they should have a clear idea of how that goal should be attained. This was the case, for example, for the allied democracies that fought World War II. The goal was the destruction of national socialism and fascism. The strategy was war for total victory. Especially in Europe and Japan, such a common purpose could also be observed in the two decades after the war. The goal was reconstruction; the means, hard work.
In such situations, visionary leaders can inspire the population to make huge sacrifices for the common good. The war effort was one example, but so was, for the U.S., the Marshall Plan. Through this plan, more than $100 billion (in today's dollars) was generated to help Western Europe and Japan back on their feet. Correctly, U.S. leaders saw this as an investment that would more than pay itself back - as indeed it did: Western Europe and Japan developed into wealthy new markets, providing a huge boost to the US economy. Moreover, the Marshall Plan helped put the countries involved firmly in the democratic camp, making them strong U.S. allies.
The vision and capability required to create programs such as the Marshall Plan, and generate the public support needed to carry them out, are sorely lacking today. Up till now, our leaders have been unable to formulate a clear goal, much less a clear strategy for development. For reasons explained in this book, it is highly unlikely that current leaders and politicians will be able to unite and set in motion a process of genuine sustainable development. Even less likely is that they can inspire the public to make the needed sacrifices. Instead, as members of the privileged minority that has enriched itself at the cost of the rest of society, they are likely to avoid the topic of sacrifice altogether.
Today's political establishment, then, is unlikely to reform itself. Among the public, however, the potential to push for change is greater than ever. Since the early 1990's, voters have been looking for new leadership. Both in the newly emerged democracies and in countries with a longer democratic tradition, including most of the rich nations, many people are fed up with politics as usual. They get tired of politicians who, rather then address society's problems, spend their time pandering to special interests and quarreling with political opponents. Thus considered, the outlook for a movement as described in Chapter XIII is better than ever.
There is yet another circumstance favoring change: people have faster access to more information. Thanks to the rapid evolvement of mass communication and the increased freedom of information that has accompanied democratization, the possibilities of spreading new ideas are better than ever. Even so, radical ideas for change such as those proposed in this book are unlikely to gain momentum. It is even less likely that a movement to put those ideas into practice would actually get off the ground and take on the proportions needed to achieve significant and lasting change. But that's no reason not to try. Many major events in world history were set in motion in even less favorable circumstances, and came about against greater odds.
Perhaps the best reason for hope is that the huge benefits of sustainable development can be obtained at minimal cost. The solutions and strategies suggested in this book would require sacrifices only from a small, rich minority. Even they would not see a significant decline in their standard of living, much less be deprived of the basic necessities of life. On the other hand, almost everybody, including those members of the rich and powerful who earn their wealth in respectable ways, would come out on top. Not only in terms of better health, improved physical and economic security, and a cleaner and safer environment, but also as a result of the economic opportunities created by sustainable development.
One of the points made in this book is that investment in sustainable development would create strong economic growth. Today, that would mean increased consumption of finite natural resources. Even if production is transformed in the ways suggested in this book, non-renewable resources will still be used. And even when measures to limit pollution to an absolute minimum are all carried out, continuing growth will mean that the carrying capacity of the world's ecosystem will, at some point, be exceeded.
It is therefore obvious that we should strive for a balanced, no-growth situation at some point in the future. This will come about as people realize that a further increase in production and wealth is no longer called for. As productivity increases, people can choose to have more leisure instead of higher incomes, and spend more time on activities that do not consume finite resources. Rising productivity resulting from technological development could then be used not to create more wealth, but to decrease work time. Thus, when the primary goal of sustainable development is achieved, the aim should become to arrive at a state of ecological, social and economic equilibrium.
This equilibrium would never be perfect. Even with the most advanced forms of recycling, no production cycle can be 100% efficient: there will always be losses of non-renewable raw materials, especially metals. Therefore, at some point in the future the need will arise to look outside our planet for new raw materials. That could make space exploration and, in the far future, the mining of other planets a condition for maintaining the living standards that by then, people will have become accustomed to. The effort this would require could provide humanity with a new, collective, greater purpose.
Such a purpose is important not only in a material, but also in a psychological sense. People need a greater, common purpose, going beyond personal interests, to achieve the form of collective well-being and optimism that makes life gratifying. In Europe and the U.S., this common purpose existed in the post-war decades - a time remembered by most of those who lived through it as one of happiness and optimism. Today, that greater purpose should be sustainable development; in the future, it could be the conquest of space.
Involvement, critique and flexibility
So what next? You, the reader, may agree that the problems discussed in this book are real and need solving. You may also agree that our current leadership is unlikely to start up the process of change. You may even feel that the approach offered in this book could make a difference. Even so, chances are you'll put this book aside - and that's that.
For setting us on the path to sustainable development, that won't do. On the other hand, it will not be necessary to mount the barricades either. Many people contributing a little can create the snowball effect that is needed. Point out books like this to people who might be interested. Discuss themes related to sustainable development when the opportunity presents itself. Support organizations involved in one or more of the components of sustainable development. Perhaps, some day, join a movement as proposed in this book.
Most important of all is to maintain an attitude of constructive criticism. A prime condition for sustainable development is the awareness that to get ahead, people must unite. They must overcome differences and compromise where necessary. Take this book as an example. Few readers will agree with all the analyses, solutions and strategies proposed. Environmentalists may challenge a strategy that involves growth even for the rich countries, arguing that for a rational use of natural resources, the latter must shrink their economies. Proponents of small scale initiatives for development will denounce the proposed large scale approach based on a global development plan. Nationalists from poor countries are likely to condemn the conditioning of aid and the role attributed to transnational business. Market buffs may join small-scalers in criticizing the key role attributed to the state. Conservatives are sure to find fault with this also, as well as with the emphasis put on the rehabilitation of offenders. On the other hand, liberals are likely to decry the suggestions aimed at keeping unrepentant offenders from the streets.
My first response to such opinions is that everything in this book is open for discussion. Reasonable argument can lead to new conclusions and better ideas for solutions. But if you have objections, don't wait until all of them are overcome. Instead, look at the tenet of sustainable development in general - and judge if what is proposed offers a better perspective than what is currently done and advocated. When the conclusion is that in spite of all its shortcomings, the things proposed in this book go in the right direction, offer support.
As I've indicated, one of the basic operating principles of a movement for sustainable development should be that every analysis and proposal is open for discussion. If alternative solutions and strategies can be argued to be more effective, they should replace or supplement what has already been proposed. Reason, unbiased analysis and flexibility, not dogma, should be the intellectual basis for sustainable development. Yet this openness should not lead to endless discussions on every theme related to sustainable development. Mechanisms should be used to limit such debates to an exposition of views and analysis of arguments, followed by a clear-cut decision on the course to be followed. In exceptional cases of continuing disagreement, arbitration could provide the answer. Then, all involved would have to be flexible enough to abide by the outcome, even if it were contrary to their original point of view.
A basic condition for sustainable development is mass support. The biggest challenge of all is to generate that support among a public that is already numbed by an endless flow of information. To break through this numbness, it is crucial to gain the support of at least part of society’s opinion leaders: of the members of our intellectual, cultural, political and economic elites. Obtaining this support will be difficult. People will have to discard ways of thought that are so deeply ingrained that they've become dogmas. What's worse, those who can muster the intellectual flexibility to do so will expose themselves to the ridicule of colleagues who cannot. And of course, if anything approaching what has been proposed in this book is set in motion, members of the present political and economic elites would stand to lose some of their power and wealth. Still, there is hope. In all elites, there are members who dare to go against the grain, have a strong social conscience and are aware of the dangers we face if we continue on the current path. They should be drawn aboard to give the movement momentum.
Another group of key importance, but difficult to recruit, is the scientific community. In an era of increasing academic specialization, scholars expose themselves to ridicule when actively engaging in efforts to change society. Scientists as well as journalists are held to a professional code of "objectivity", which keeps them from identifying with calls for action.
Yet here also there is reason for hope. In late 1992 more than 1600 scientists, including 102 Nobel laureates, collectively signed a "Warning to Humanity". It states the following: "No more than a few decades remain before the chance to avert the threats we now confront will be lost and the prospects for humanity immeasurably diminished. A new ethic is required - a new attitude towards discharging our responsibility for caring for ourselves and for the earth. This ethic must motivate a great movement, convincing governments and reluctant peoples to effect the needed changes".
Unfortunately, such initiatives do not receive the attention they merit. If the movement proposed by the 1600 has come about, only few people know about it. In the media, the laissez faire point of view continues to prevail: mainstream economists and conservative opinion leaders still swamp the natural and social scientists who emphasize the need to address environmental degradation and poverty.
The challenge, then, is to start the "great movement" the "Warning to Humanity" proposes. The backing of key opinion leaders could help such a movement to muster mass support. In the final instance, however, the key to meaningful change lies with the individual. You can make a difference. In pondering if you will do so, there is one thing you should remember: doing nothing would not imply remaining neutral. On the contrary, it would amount to support for the status quo, and thus, for the continuing abuse of our natural resources and for policies that are liable to perpetuate and in the longer run, increase poverty and human suffering. On the other hand, supporting the drive for sustainable development would imply backing an effort to provide economic and physical security for all people, and to make the earth a habitable place for future generations - including your own offspring. The choice is yours.
This was the final page of the book Global Development as presented on this site. To read more, click back to Global Development – the book. To order a hard copy of the (complete) book click on Jan van Arkel International Books or mail to f.j.doorman@wanadoo.nl
Click below for links to updates and new perspectives on events and developments that have taken place since the publication of the book in 1998.
Updates to Global Development:
August 2000: The need for a global development program, financed through money creation
September 2001:The economic downturn and money creation for sustainable development
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