Wednesday, 15 October 2014

How to Make the Economy Sustainable, and to End Poverty in the Process

Ladies and gentlemen, I want to try out on you today a thought experiment. I know that you may find some of what I have to tell you hard to swallow. Nevertheless, I commend this thought experiment to you. For it may have a little – just a little – power to change your thinking, and so eventually the world, for the better.

I must begin with a short note on terminology. It irks me that enviros and politicians have found it so easy to pervert the word “sustainable”. What the word should mean is “capable of being sustained”. Or, otherwise said, “able to endure into the future”. What it seems to mean in enviro-speak, though, is more like “minimizing use of natural resources”, or even “minimizing effect on the surroundings”. I want to make it clear to you, that when I use the word sustainable without a sniff before it, I mean able to endure into the future.

So, let’s begin the thought experiment.

Picture, if you will, a rolling, grassy plain. And, standing on that plain, many human beings. A few hundred, or a thousand, should suffice. Now imagine that one of these human beings has a parcel, a parcel of goodies. What kind of goodies does not matter very much, so long as they are yummy.

Watch, now, as the human being with the parcel consumes some of it. But then, using what he has consumed, he generates some more goodies. He adds them to the parcel. And then, he throws the parcel to one of his neighbours. That neighbour, in her turn, takes out some, puts in some, and passes the parcel on. And on. And on.

Imagine, for a moment – only – that each human being in this chain contributes only half as much yumminess as they take out. What will happen? The parcel will get smaller and smaller. After it has been through thirty or forty people, it will be microscopic. Time for another parcel – which must come from the outside world.

Imagine, on the other hand, that each human being contributes at least as much as he or she takes out. What happens? The parcel gets gradually bigger. Eventually, it gets too big for an individual to hold, and some of it has to be put down on the ground. The parcel carries on its way for ever, and our rolling, grassy plain becomes covered with goodies. Now that, ladies and gentlemen, is a sustainable economy!

Now, I want you to “zoom out” – to take a broader view. Our game of pass-the-parcel doesn’t quite represent a real economy. Because, in a real economy, there are lots of parcels. And they’re a lot smaller. Where I live, they’re called pennies – although, in most of the world, they’re called cents or some such.

It’s difficult to visualize pennies flying from one individual to another, and there would probably be injuries. So I’ll use a different metaphor – light. Imagine if each of those people, on that rolling plain, takes in light, and gives out light in return. If each of them gives out less light than he or she receives, the economy – the candle, if you like – sputters and dies. But if each individual gives out as much as he or she receives or more, the candle burns. And continues to burn, brighter and brighter. Just imagine, every one of those human beings on that rolling plain, happy, smiling and bathed in light!

Now let’s zoom out again. Look in your imagination, from out in space, at the planet Earth. Look at the places where there is peaceful, purposeful, productive human activity. Think of those billions of human beings, who play their full part in this activity, as sources of light. Watch them, in your mind, glow – and grow. Watch the light of peace, prosperity and progress spread all over the planet.

But the world today isn’t like that, is it? Why not?

One possible reason presents itself. Look closer, and among the producers of light, you will find dark figures. These are people who are too young or too old to produce, or who are ill, injured, or mentally or physically disabled. They consume light, but they are unable to generate light. Could these people be the reason why the light doesn’t spread?

Look closer still at the producers, the generators of light. Many of them, you will find, produce far more than they consume. If they do enough, their extra productivity can make up for the presence of the dark figures. For the mathematicians among you, the break-even point comes when the proportion of the productive in the population, multiplied by their productivity, reaches 1. If the dark figures are, say, one-third of the population, then the light can still spread, provided the productive two-thirds each produce at least 50 per cent more than they consume.

This load is supportable, as long as productive individuals have confidence that, over the long term, they will break even. No-one can reasonably grudge re-paying help to those who have helped them in the past, or investing in those who will help them in the future. The economy can support these dark figures without losing sustainability, provided – and it is a big provided – that they do not let themselves become a long-term drain on others.

But look closer yet, and you will find, mixed in with the radiant producers and the dark non-producers, a third kind of individual. These individuals consume light, like the others. But, instead of adding to the economy by being productive in their turn, they actively take from the economy, and damage it. They emit, not light, but a dark brown, foul, toxic ooze that pollutes everything it touches. I name them the Oozers.

When this damaging, polluting ooze reaches the bright producers, it begins to dim their light. It causes productive human beings to become less prosperous, and to start to lose confidence in the future. It takes away their incentive to develop their skills and to produce more and more. If the ooze reaches a high enough concentration, it can suffocate individuals entirely. It can snuff out their light, and make them dark.

As with the non-producers, there is a relationship between the proportion of oozers in the population, the amount of damage each causes, and the effects. If the proportion of oozers, multiplied by the damage each causes, exceeds the proportion of the productive times their productivity, the economy is headed downhill. It is not sustainable. And this can happen even when the actual proportion of oozers is quite small, perhaps only two or three per cent. For in today’s kind of world it is, as everyone knows, far easier to destroy than to build. It is far easier to do a million dollars’ worth of damage than to deliver a million dollars’ worth of value.

Zoom out once more, and look at the planet as it actually is. See the arbitrary red lines, which constitute political boundaries. See that, in areas of the world where the oozers are relatively few, or relatively innocuous, there is some light and prosperity. Not nearly as much, to be sure, as if the oozers were not there. For, even in the most advanced Western economies, the negative effect of the oozers is a terrible burden on us all. And, today, the oozers are becoming more and more virulent.

If you wonder why the world economy in the 20th century has been so unpredictable, so up and down, consider the oozers as a root cause. For the world economy is like a battle-ground between productive human beings and oozers. When and where productive human beings win, the economy goes up. When and where oozers win, the economy goes down.

In areas of the world where oozers are entrenched in power, the light is, and has been for decades, firmly suppressed. And this has consequences. In Africa, in South America, economies, that were never very healthy in the first place, are in danger of dying.

Now, look at people in those places, where the ooze suppresses the light. You will find yet a fourth kind of individual. They are not oozers; they are not evil or destructive. Like the non-producers, these individuals are dark. But they are not dark because they are too young, or too old, or ill, or injured, or disabled. They are dark, because the light does not reach them. They have no opportunity to take part in the world economy. Ladies and gentlemen, there is a name for these people. They are called the poor.

How can we human beings end this unnecessary state, which is called poverty? The answer is simple. We must help the poor to help themselves. How do we do that? By bringing the light to them – by giving them the chance to take part in the world economy. And who or what stands in the way of our doing that? The destructive oozers, and their polluting ooze.

Imagine, just imagine, if the oozers were no longer among us. Imagine if those, that maliciously damage our economy, had got the come-uppance they deserve, and had drowned in their own foul ooze. Can you see what would happen? With the oozers gone, productive people would be able to unleash themselves. Good people would receive at last, in a free market without coercion, the rewards they deserve. And this would give them the incentive to build on their talents, to develop their skills, to produce yet more. Prosperity would breed prosperity. Progress would breed progress. And, by the miraculous phenomenon which economists call “trickle-down”, opportunities would come even to the very poorest.

What about natural resources? We would use them – but we would use them wisely. We would use them to help us gain access to more and more resources. We would use scarce resources to get us to the point where we don’t need them any more, because we have better alternatives. And we wouldn’t waste any resources at all on oozers.

The world economy would gather pace, and more pace. Beyond a certain point, when good people’s immediate needs and desires are satisfied, and their personal futures secure, we would be able to start thinking about the human future. Our economy would become truly sustainable, because productive human beings would, at last, have enough resources and time to address the longer-term future of the human race.

Zoom out again. Planet Earth has supported us human beings for thousands of years. It has provided us with the natural resources we need to grow. But, today, it’s not the healthiest of places. And some of the resources we need may be, perhaps, in danger of running out within a few decades.

Enviros and politicians, with their perverted notion of (sniff) “sustainability”, tell us that we must cut our use of natural resources. And then, that we must cut it again, and again. Even though, as they well know, the long-term effect of policies based on this notion can only be to destroy our economy. In the name of (sniff) sustainability, they want to take away our means of sustenance, and to condemn us all to poverty. Ladies and gentlemen, the enviros and the politicians claim to care about the future. But they don’t care about your futures. Or mine.

Zoom out one last time. There is, within nature, an analogy to our situation today. You might enjoy it.

Think, if you will, of the Earth as like a giant egg. And think of the human race as like a chicken inside that egg. What does a chicken do, when his egg becomes foul and the nutrients start to run out? He hatches! He breaks out of the egg, into the big world beyond. He takes the next step on his journey towards becoming a rooster.

So here’s what we have to do, to make ourselves a liveable economic future. One, get rid of the foul oozers, that damage our economy. Two, create the conditions for a fully free market, which will unleash the productive and get the economy moving. Three, look wider than just planet Earth.

And that, ladies and gentlemen, is how we can make the economy sustainable, and end poverty among human beings in the process.

(First published on December 24th, 2002)

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