At 4:16 PM -0500 12/16/98, Edward Weick wrote:
>
>
>In an essay forwarded to this list, Richard Douthwaite paints a
>potentially disastrous picture of the modern world.
<<snip>>
>But lets poke at it a little and see how real it is.
>
>
>
<<snip>>
>Growth did not, as Douthwaite appears to imply, stagnate because of a
>lack of effective demand, but because, in the euphoria of the boom,
>bad investments were made. And it was not only foreign capital that
>bailed out. Domestic capital also did so.
CWD- The "bad investments" were bad in part because they created
cpacity in excess of demand.
>A point that Douthwaite appears to ignore is that there are many
>different kinds of capital flows. There are, for example, long-term
>flows that relate to infrastructure of the kind that the World Bank
>has helped to develop. There are flows that relate to the exploitation
>of natural resources such as Nigerian and Indonesian oil. There are
>flows which take advantage of cheap labour to produce commodities for
>the rich world, such as Nike shoes. And there are speculative flows.
>Each of these vary greatly in the time required to decide whether a
>certain investment should be made, the time needed to make that
>investment, and the time required to withdraw from the investment if
>things do not go well. Trading in paper or currency is almost
>instantaneous, while an investment decision on a massive work such as
>the Itaipu Dam on the Brazilian-Paraguayan border must take several
>years and perhaps decades.
>
>
>
>The point is that each of these various kinds of investments needs to
>be treated differently when the stability or humanity of the economic
>world is at issue. It would seem that the most disruptive type of
>capital flow is currency speculation. If the concern is disruption,
>this type of flow must be the focus. The most exploitative forms are,
>probably, natural resource and commodity production related
>investments. If the concern is exploitation of the poor world by the
>rich, these should be the focus. Solutions to some of the problems
>that capital flows create have been proposed; for example, the Tobin
>tax in the case of currency speculation. And there is the Universal
>Declaration of Human Rights which says everything that is needed about
>exploitation, but which has been virtually ignored for the past fifty
>years.
>
>
>
>I would also take some issue with Douthwaites points about why wages
>are falling. In Canada wages have been stagnant since the late 1970s.
>A reason often cited is that the growth of productivity began to slow
>at about that time. Prior to about 1975, both productivity and wages
>grew rapidly. Why the stagnation since? In my opinion, the least
>likely reasons are the export of capital or free trade, and one likely
>reason is that all of the work required to rebuild a war-devastated
>world had come to an end. Europe had not only been rebuilt, it had
>become a modernized competitor in world markets.
CWD- Real wages have been declining in north america since the early
70's. I believe that true reason is ideological. If productivity is
defined as output per unit of work (in some ways a very perverse
definition) it is obvious that it has not slowed at all or the massive
layoffs of the last 15 years could not have been made without drastic
production cuts. In many industries (e.g. forestry) output has grown
steadily even as jobs were slashed. Until the early 70's, unions
dominated the labor scene. From that time, the idea that adequate wages
were "anti-competitive" and "greedy" began to take root. There was much
that was undesirable in the union modrel, but providing adequate wages
was good for both social equity and for economic growth.
By the 80's the ideology of capitalistic greed was not only tolerated
but glorified. Workers who wanted a living wage were greedy, but
"investors" were just accumiulatring wealth so it coiuld "trickle
down". In the 3rd world, the colonial tradition of converting the land
on which the people had always subsisted to specialized export crops
accelerated, driving more and more people off the land to cities or
maquilladoras where they were desperate enough to work in appalling
conditions for almost nothing. (Megaprojects of the sort to which the
World Bank was addicted fostered and abetted this process.)
Corporations then used the threat and often the reality of moving their
facilities to places with low wages and few environmantal controls to
force wages down. This is all as Douthwaite rightly says. Unlike Henry
Ford, they forgot that products can be sold only to people who have
enough money to buy them.
CWD- The global monopoly game has led to unprecedented inequality, with
the vast majority of the wealth concentrated in a few hands. This
leaves the rest of us with not much money with which to buy their
products. Consumer debt is very high. I would have thought that was
obvious. And those who believe that the rich countries can dodge the
depression embracing the world (even without the Y2K event) are as
ostrich-like as the venerated economists who declared in the summer of
1929 that stock market cycles wwere a thing of the past.
>While I disagree with Douthwaites reasons for needing it, I do not in
>general disagree with the kind of world he thinks we need. Indeed, we
>need a less wasteful world, one that husbands non-renewable resources
>and makes far greater use of renewables a more sustainable world.
>But I do not believe in the efficacy of making, to quote Douthwaite,
>"a dash towards sustainability". Something as cumbersome as the
>economic world is probably not capable of dashing. If it tried, the
>result might be either falling over or hitting a wall.
CWD- We "dashed" pretty quickly towards environmental degradation,
species extinction,and inequity during the past 20 years, and I think
the wall is right now looming ahead of us. I will be very surprised if
the world soes not look very different by this time next year, let
alone two years from now.
"A wall of infinite dimension stands before the course of human evolution.
It is the finitude of the earth and its resources."
--Steve Morningthunder
Particularly the finitude of its ability to absorb wastes.
Caspar Davis
