John B. Cobb, Jr., Ph.D. is Professor of Theology Emeritus at the Claremont School of Theology, Claremont, California, and Co-Director of the Center for Process Studies there. His many books currently in print include: Reclaiming the Church (1997); with Herman Daly, For the Common Good; Becoming a Thinking Christian (1993); Sustainability (1992); Can Christ Become Good News Again? (1991); ed. with Christopher Ives, The Emptying God: a Buddhist-Jewish-Christian Conversation (1990); with Charles Birch, The Liberation of Life; and with David Griffin, Process Theology: An Introductory Exposition (1977). He is a retired minister in the United Methodist Church. His email address is firstname.lastname@example.org..
This essay was presented at a conference of the Canadian Society of Ecological Economics, Jasper, Canada, October 21, 2003. This material was prepared for Religion Online by Ted and Winnie Brock.
While the dominant economic theory supports policies that are destructive both of human community and of the natural environment creating a global situation becoming less sustainable daily, nevertheless, the writer believes, there are helpful signs.
The regress is evident. The world is still in decay. Of course, there are scattered examples of restoration of what seemed lost, but the most one can say in general is that some forms of decay have been slowed. Other aspects, such as global warming, may be accelerating.
My own country, the United States, now seems far more committed to controlling the diminishing resources of the planet than to slowing their exhaustion. Nothing is more unsustainable than huge military budgets and actual warfare. The American goal of global hegemony has nothing to do with achieving a sustainable society. Short-term profits for American corporations have far higher priority than the future condition of the planet. My fear is that, although our record and our global role are the worst, we have largely corrupted other governments as well. Corporations are playing a dominant role everywhere, and whatever the personal concerns of a few CEOs, corporations are set up with profit as their primary mission.
There are, at the same time, many hopeful signs. As corporate dominance becomes more and more apparent, there is more discussion within and among corporations of how their global power should be exercised. There is increasing talk of how corporations can make greater profits when they are more frugal with resources. Corporate scandals in the United States have sensitized some corporations to the need to be responsible to the public. Environmental concerns are on the radar screen almost everywhere.
However, I will talk about one very limited topic where progress is slow but, I believe, steady. It is one way of formulating the topic to which For the Common Good is addressed.
When Herman and I wrote that book, we had very little hope of persuading the dominant economic community to change. Of course, we would have liked to do that. But we recognized that the more realistic goal was to weaken the support of economic ideology and the policies it generates on the part of people of good will.
The situation as I saw it then is that the dominant economic theory supports policies that are destructive both of human community and of the natural environment. People of good will to some extent saw that but were persuaded that the problem of poverty had to be addressed as primary. They accepted the economists’ argument that rapid economic growth, national and global, is required to address the problem of poverty and that, with the attainment of prosperity, other problems could be solved as well. Hence they supported the policies advocated by the dominant economic community.
Meanwhile, these policies had the support of the dominant financial community and much of the business world. These profited immensely from following the recommendations of the economists. Thus we had the consensus of the experts in the field, those who were morally concerned, governments, and the transnational corporations.
I knew no way to break the close alliance between corporate interests and economic ideology. However, it did seem to me possible to drive a wedge between these and the people of good will who had been giving them support. I believe that since then progress has been made on this front.
Our book shows, I believe, that there is no reason for people of good will to accept the basic assumptions that are quite explicit and clear in standard economic theory. Other assumptions are far more plausible. Most people of good will believe that personal relationships are important for human well being. When one fully realizes that economic theory places no value on personal relationships or human community, one understands why the policies that follow from the theory end up weakening such relationships and community in general. People of good will are then pressed to ask whether they should support policies that have these effects. When one fully realizes that economic theory values the natural world only in terms of the price its elements command in the market place, one will understand why present economic practice degrades the world. People of good will must then ask why the policies expressive of this theory should be continued.
The answer, of course, has been that poor people must be raised from poverty and that the expectations of middle class people for the good things of life must be met. In theory this could be done, at least in part, by redistribution of goods. But we all know that this would be possible only by bloody revolution, and in all probability, once the wealth was distributed, the production available for distribution in future years would decline. A second theoretical possibility would be to differentiate between those who have enough and those who do not. The former would stay where they are in terms of consumption, while the poor would receive more. But, once again, such policies could be instituted only by force, and the results would be disastrous.
The only way, it seems, that the condition of the poor can be improved is by overall increase in production and consumption. A rising tide, we are assured, raises all ships. If we point out that over decades the vast increase in total production has not improved the lot of half the world’s people, we will be told to be patient. Eventually, prosperity will trickle down to all.
Many people of good will have been persuaded of this scenario, and they regard those who protest because of present suffering with condescending sympathy. The protestors, they think, do not understand that the policies to which they object constitute the only way in which the lot of all peoples can eventually be improved. When they see the skyscrapers rising in Shanghai, they are prepared to overlook the misery of the peasants, the workers, and the unemployed, expecting this misery to prove a temporary cost in the overall rise to prosperity of until recently underdeveloped nations.
Despite the reinforcement of optimism about overcoming poverty that many seem to derive from casual views of China, overall confidence in present policy is declining. There is general recognition that it has failed in most of Africa. Many recognize that it has destroyed the economy of Argentina. Brazil has elected a leader who opposes it. In Venezuela, even with strong support from the United States, its supporters have thus far been unable to depose a president who opposes it. In Ecuador, opponents seem to have the upper hand.
The Davos meetings no longer have the confident spirit that once characterized them. In various ways and for various reasons, the International Monetary Fund, the World Bank, and the World Trade Organization are on the defensive. Around the world the slogan of the growing Porto Allegro meetings, “Another World is Possible”, is arousing hope for an alternative. The literature spelling out the alternative is growing.
However, optimism must be checked. If there is any recent change in the U.S. government, it is a move away from the pretense of interest in the well being of the people of the world and toward a franker affirmation of American self-interest. We have used the Bretton Woods Institutions and trade agreements to force third world nations to give up subsidies of their products and to open their markets to our highly subsidized ones. If there is any danger that the Bretton Woods institutions will really support the interests of other countries against us, seeking the level playing field advocated by economists, the U.S. will allow these institutions to fail. I suspect that this is what happened recently with the WTO meeting in Cancun. The developing nations wanted the basic liberalizing principles that have been forced on them to be applied also to the developed nations, including the United States. But the United States, and other stronger nations, preferred to have the meeting fail rather than openly discuss their hypocritical policies.
Whereas I earlier pictured the situation in terms of economic theory, corporate self-interest, and good will, I must now acknowledge that another factor has been present all along – American power. Previously, I had been impressed that the United States was sufficiently committed to the economistic ideology I opposed, that it was willing to subject itself to decisions of economic authorities, such as the WTO, that it did not completely control. It seemed so committed to economic globalization that, whereas it thumbed its nose at the World Court and vetoed anything it did not like at the United Nations, it obeyed WTO rulings. Now, I see that the situation is changing. At least with the present administration, what we cannot completely control, we will abandon. Only policies that favor American corporations and American imperial power will be allowed.
Even this, however, may help. The overwhelming support of economists and those many other academics who follow their lead cannot be taken for granted for a brazen American imperialism. People of good will are being alienated in large numbers. If there is enough reaction to defeat the present administration in the 2004 elections, the probability is that the result will be a return to the less blatant imperialism of the recent past and greater willingness to work with our allies. Economic theory is likely to regain a larger role in policy formation. Nevertheless, there is an opening for discussing more radical alternatives.
In my opinion, the general realization that policies justified by the dominant economic theory destroy human community and degrade the natural environment should be enough to persuade people of good will that they should look in other directions. When, over decades, it becomes clear that not all ships are raised by the rising tide, that, indeed, the littlest ones are sunk, and many others are damaged, that only the yachts truly float freely, support of economistic policies should end. But it seems that more is required to break through.
One reason is that the worsening distribution of income and wealth does not disturb the economic community in general. Distribution is not an issue with which mainstream economic theory is directly concerned. That theory aims at increasing total consumption. If most of that goes to the rich, no matter. Hence many economists can shrug off the growing gap between rich and poor as unimportant.
On the other hand, economists do assume that economic growth, especially increased consumption, adds to human well being. Without that assumption, everything collapses. A frontal attack on this assumption should be more difficult for economists, along with those who implement economistic policies, to ignore.
In some sense, this central belief is virtually tautologous. If consumption is by definition the satisfaction of human desires, then satisfying more desires surely contributes to human well being. We can quibble even with this. Some desires are for goods that are in fact self-destructive. But I will not press this point. Let us assume that as more people are able to do more of the things they want to do and buy more of the things they want to possess, they are better off. This is the truth underlying the appeal of economic theory and the policies it supports.
However, this must be qualified. Imagine that people in an otherwise poor country have a very valuable natural resource such as oil. Perhaps the oil is exploited at a rate such that it will bring large income to the country for twenty years. Suppose during those twenty years the people spend this income on consumer goods. Are the people really economically well off, even though their income will drop drastically at the end of the twenty year period? Obviously not. They will be well off economically only if, during the period of high income, much of this is invested in ways that provide jobs and income after the oil is exhausted. To ignore the limits of the resource would be madness.
The relevance of this to the discussion of growth is that the way economists and governments measure growth takes no account of the exhaustion of resources. But clearly, the depletion of the oil should count against the income from its sale in calculating the sustainable economic welfare. There may be other costs as well. If there is extensive pollution involved in the pumping, transportation, and processing of the oil, this has its economic costs. These should be subtracted from the income. But the standard measure, the Gross Domestic Product, ignores depletion of resources and adds the costs of dealing with the pollution to the gains from the sale.
The justification for this ignoring of the loss of resources and adding costs is that the GDP is a measure of market activity, not of economic welfare. There are good reasons, no doubt, for interest in the quantity of market activity. But common sense indicates that what we should aim to maximize is not such activity but the economic well being of people. This seems so evident, that I continue to find it surprising that economists on the whole are so little interested in the distinction.
In our book, we summarize the rare efforts to develop indices of economic well being. The most important effort was that of two leading American economists, William Nordhaus and James Tobin, around 1970. They developed a Measure of Sustainable Economic Welfare for the United States from 1930 to 1965. They did this work before environmental issues had become so important. Even so, their measures indicated that whereas economic growth as measured by GNP correlated well with economic well being until around 1950, since that time there was little improvement in well being despite considerable increase in economic activity. In other words, during the later period, the losses entailed in market activities were roughly equal to the gains.
We should note that this whole procedure leaves untouched the assumption that true human well being is entirely economic. If we draw a broader picture of what is important to human beings, the leveling off of sustainable welfare in economic terms would be replaced by a definite decline in overall human terms. The reasons for changing direction become even stronger.
In my view, economists and government officials should have taken the Nordhaus-Tobin study as a shocking warning. All their successful efforts to stimulate economic activity did not benefit people even in narrowly economic terms. Why, then, continue those efforts? Why not, instead, develop policies designed to benefit people economically, at least, if not in broader human terms.
The most shocking feature of this whole story is that the authors of the report do not even mention this as a possible conclusion. In their summary, they ignore the different between the earlier period, when the gains from growth substantially exceeded the costs, and the later period, whey they did not. Averaging the whole, they argued that growth had been beneficial overall. They recognized that the GNP was far from an ideal measure of economic well being, but they affirmed that it was good enough for practical purposes. They then acted on this conclusion, dropping the whole project. No other economist picked it up.
My suspicion is that the goal of Nordhaus and Tobin in carrying out this study was not really open-mindedly to consider whether economic activity should be directed in different directions, but rather to reassure themselves and other economists that no change is needed. Standard economics can be viewed as the science of how to increase market activity. To justify this narrow activity, mainstream economists need to believe that increasing this activity is a good thing. We can hardly expect them to open themselves to the possibility that it is not.
On the other hand, if the public understands that this is what economists know how to do, they may look elsewhere for help in deciding when to turn to economists for guidance. Surely what we hope for from the economy is improvement of the economic condition of people. This goal should be subsumed under a larger one of improving the general well being of people on a sustainable basis. We need governments that aim at these wider goals. We need wise leaders who can judge when the increase of market activity in general is likely to serve the public good. On those occasions when they judge it will, we can look to the economic establishment for help. And, of course, on many technical questions, we can consult with them in forming policies that also have input from persons in other fields.
There could be a happier scenario. This would be that the profession of economists as a whole would decide that its real goal is to contribute its expertise to the improvement of the human lot in general by improving the economic condition of people. They could then help us devise policies that would tend in this direction. Some of these policies would, no doubt, increase market activity; some would not.
You will rightly accuse me of fantasy. Habits are deeply entrenched. It is in the interest not only of the economic profession but also of many corporations that we not examine theory or fact but only continue in the deep ruts established by long habit. Persons of wealth have always largely controlled governments, and at least in the United States, they are more successful in this regard now than ever before. Obviously, they also own the media that shape public opinion. Their influence on educational institutions is enormous. If they do not want the public to see the insanity of present policies, they are in good position to prevent that from happening.
Even so, common sense cannot be suppressed altogether. Around the world most people know that the policies of recent decades have not benefited them. They see ominous signs of having to pay dearly for these policies in coming years. There are many people in government who do care about the human prospect and would like genuinely to benefit their constituents.
Accordingly, I think it has been worthwhile to renew the project of measuring sustainable economic well being. I am glad that our efforts have been continued by Redefining Progress in the United States and have encouraged individuals and groups in a number of countries, especially in Europe, to develop similar measures for those countries. None of us have had the resources of a national government even of a major department of economics behind us. Hence, our work is that of amateurs. But the consistency with which these efforts show the diminishing economic benefits of economic growth caused by the rising costs suffices to make the major point. The world as a whole is headed in the wrong direction.
Mark Anielski has made a break through. To the best of my knowledge, the Province of Alberta is the first place where a government has given support to this type of project. That the government of Canada has also shown interest is, indeed, a hopeful sign, although I remain concerned that when the implications of such studies are understood, they may be suppressed.
In sum, while we cannot avoid the fact that the global situation daily becomes less sustainable, there are hopeful signs. Twenty-five years ago most people enthusiastically supported the policies that still dominate the planet. They accepted the theories of the experts, and looked forward to the prosperity that would fulfill their expectations. That is not true today. Disillusionment is widespread. There is openness for new ideas. Far more effort has to be exerted by the powers that be in order to keep so many people in the dark. As the mailed fist is substituted for the velvet glove, the pretense that the powers that be are truly concerned for our human well being is abandoned. If we can point the way forward to a world in which human well being is cherished and sustained, our message will resonate where it is heard.