By Peter Anderson
On current trends, say some experts, humans could theoretically be the only species left on the planet within 50 to 100 years — an absurdity that highlights the imminence of environmental collapse under the weight of unplanned human economic activity.
But while the domination of economy over ecology is reaching critical proportions, the world's top economic regulators, who continue to pursue development and restructuring agendas with untold social and environmental consequences, seem purposely oblivious to the fact. This is true especially of the World Bank and the International Monetary Fund.
Even the economic results are appalling. Despite all the hype in the 1960s about "development economics", with only a few notable exceptions most of the countries of the economic south are not much better off, and many are positively worse off, than they were 30 years ago.
It is not difficult to trace the immediate causes of this deteriorating situation to the debt crisis of the 1970s, when, bloated by petrodollars from souring world oil prices, the international banks of the First World sent emissaries to the Third World to unload their cash — at a price.
The pay-back came in the 1980s, when economic conditions in the Third World got seriously worse. Subjected to the economic policies of the World Bank, by the end of the decade sub-Saharan Africa actually produced less per head of population than it had at the beginning — an impoverished continent became even poorer.
However, while the poor countries were locked into a never-ending cycle of ballooning debt and impossible repayments, the banks shored up their finances by writing off failed loans, rescheduling debts and repairing their balance sheets. By the end of the decade, for the international banks, the debt crisis was over.
Today, from Amazonia to the Siberian forests, the seemingly unstoppable encroachment of the world market continues to wreak environmental havoc. Beyond debt and economic destruction and the sharpening division between rich and poor, this market logic now threatens the possible elimination of the fundamental biological diversity on which life itself depends.
During her recent visit to Australia, the well-known author and environmentalist Dr Susan George focused attention on the thinking and the institutions that have helped to make this situation worse. George is a researcher for the Transnational Institute, a green think-tank in Amsterdam, and is a member of the international board of Greenpeace. She is author of A Fate Worse the Debt and The Debt Boomerang.
In two talks, "The Flight from Diversity" and "Economy and Ecology", George highlighted her fears about the ubiquitous application of market principles in the post-Cold War period.
"Although I was never a fan of the ex-Soviet Union and the other countries that used to be called socialist", she said, "the fall of the Berlin Wall nonetheless had a negative side. The end of the Cold War has put an end to what political scientists used to call the systems debate. Now there is only one superpower and one system, with no variant alternative or opposition from any quarter."
Greenpeace forest campaign coordinator Patrick Anderson recently described how emerging Russian entrepreneurs, desperate for dollars, were selling off logging concessions in the Siberian forests and elsewhere to Korean, Japanese and US timber companies at fire sale prices and as fast as they could. The habitat of the last 300 Siberian tigers, thought by some to be the most beautiful animal in the world, will go down with these forests.
Logic of the 'free market'
Meanwhile, Lawrence Summers, World Bank vice-president and chief economist, has bluntly stated his view of the world economy and environment. George related comments made by Summers at the World Bank's annual meeting last September in Bangkok which show just how far "free market" thinking has gone.
"What can the West do to drive this process of reform forward?", he asked in reference to eastern Europe and the former USSR. "Number one, it can spread the truth. The laws of [capitalist] economics, it is often forgotten, are like the laws of engineering — there is only one set of laws, and they work everywhere[!]."
Summers became notorious earlier this year for his judgment in a leaked memo that the economic logic of dumping toxic waste in the Third World was impeccable — because in the low wage country people are going to die earlier, and so they won't have time to die of prostate cancer.
He said a person in a low-wage country might earn $500 a year and have 10 years left to live, whereas in a high wage country a similar person might earn $50,000 a year and have 20 years to live, and so would be contributing much more to the gross world product and to economic growth. Therefore, you should put the pollution where the lower value is.
At the World Bank annual meeting, Summers said there are no limits to the carrying capacity of the earth that are likely to apply any time in the foreseeable future. There isn't a risk of an apocalypse due to global warming or anything else. The idea that we should put limits on growth because of some natural limit is a profound error and one that, were it ever to prove influential, would have staggering social costs.
Summers' staggering judgment ignores the abundance of evidence which shows that if the capitalist world economy continues to exploit the earth's resources in the rapacious, virtually unfettered manner it now does, the future of the planet is threatened.
According to Susan George, human activity even 50 or 100 years ago was so small compared to the biosphere it did not matter that we had a completely open economy that was taking its factors of production in nature without counting their cost, processing them and throwing away the residues.
"Now, with the expansion of human activity, the economy is reaching the limit of the biosphere. Yet it is still taking without counting the true cost on one side, with regard to resources, and it is still throwing away on the other side without having any understanding of what this is doing to the biosphere, which is by definition a closed system."
In 1986 an important scientific article signed by Paul Erlich and others calculated that human economic activity was then absorbing 40% of the "net photosynthetic product", that is, the net capacity of the earth to regenerate itself, leaving 60% for all other species.
They found that this kind of economic activity was doubling every 25-30 years, which means that in a quarter of a century we would be consuming 80% of net photosynthetic product. This is clearly unsustainable. Soon we would be at 100% per cent, which means no other species would have access to anything.
"Unfortunately, this is not the way that the people who organise the world economy see it." They rely on a "free-market" scenario in which there are some very basic contradictions, according to George.
- The contradiction between the open economy and the closed biosphere means there are no price signals to tell us that we may be in grave danger. The price of logs from a tropical forest, for example, in no way represents the value of that forest in terms of stabilising the climate or as a habitat for flora and fauna and the home of biodiversity.
Although a price can sometimes tell us something about scarcity, that does not always work until it is too late. Market signals do not tell us anything about what we throw away. The market is not going to send us signals if there is too much CO2 in the atmosphere, or if there are too many CFCs.
The World Bank's finance wing, called the International Finance Corporation, is making a large loan to Egypt to build a factory to produce air conditioners and refrigerators with CFCs. The market is not going to tell us that the ozone layer is already only one-third of what it ought to be.
- The logical outcome of leaving the market to itself is dramatically growing inequality within countries and between countries.
A book by a former aide to president Richard Nixon, The Politics of Rich and Poor, shows that the top 1% of US families during the Reagan-Bush decade increased their share of family incomes by nearly 50%. Meanwhile 80% of the people all lost. The poorest 10% lost the most, their incomes falling by 15% to a level of less than US$3200 a year.
The share of family income of the richest 1% is now on average 115 times more than the lowest 10%, and this is repeated at the international level, where the gap between the wealthy, OECD countries and the poor countries has never been greater. In the 19th century, it was probably about two to one. After the second world war, the gap was about 40 to one. Now it is probably about 60 or 70 to one.
- Relying on the market to do everything makes it is impossible to define social or developmental objectives. "The only other way to organise society is through democratic discussion, various kinds of solidarity and community, and this takes a lot of work", said George.
Debt and impoverishment
Despite all this, the World Bank and the IMF are imposing the market system universally, most emphatically in the Third World. In fact, the world market is the most brutal of all markets because there are not many rules, while in most national economies there are at least certain social rules and safety
nets.
George believes the World Bank and the IMF found in Third World debt the perfect instrument to force the integration of the indebted countries more and more tightly into the world capitalist economy. They say poor countries must export more, supposedly to grow their way out of debt, but the effect is entirely different.
A recent study of African raw materials by the Transnational Institute showed there is absolutely no hope for Africa to grow out of its debts through the export of commodities because terms of trade are declining, more synthetic substitutes are being used, improved technology means lower raw material inputs are required, and there is increasing competition from Asia.
But overwhelmingly the main problem is the net transfer of wealth out of the poor countries and into the rich. In 1982 the indebted countries of the south owed the north $800 billion. Ten years later, having paid over $1300 billion in debt service, they owed $1450 billion.
The countries of the south are overall 60% more in debt than they were at the beginning of the 1980s. Africa's debt has doubled. The debt of the poorest nations has more than doubled. In that time the poor nations have paid the equivalent of more than six Marshall Plans to the rich. In the past decade, the international banks have received A$250,000 every minute from Third World debtors.
Everything that stands in their path is destroyed, George said of these dominant institutions. "Nature stands in the way of profits, so nature must be disregarded. Culture stands in the away of market extension because culture usually involves community ties, solidarity, reciprocity. The state is often in the way because it tends to regulate and sometimes even tends to protect the poor and more vulnerable groups, so the state must be reduced to the lowest common denominator.
"The World Bank and the IMF step in to determine for many countries whether the currency is devalued or to define macro-economic policy or set foreign policy (along with the US government). Such was the case when Egypt joined US forces in the Gulf War and was immediately awarded a one-quarter reduction in debt, unachieved by any other nation."
Think locally, act globally
The flight from diversity in biology, economy and ideology is the consequence of this "market mythology". While she did not
attempt to look deeper to the objective causes of the problem, Susan George made full use of the concept of diversity to counter the fatally flawed concept of the market and at the same time drew attention to a fundamental ecological concern.
However useful it might once have been, according to George, the phrase "Think globally, act locally" has become an international cliché that has outlived its usefulness and now threatens to substitute for the diversity of ideas a homogeneous view of the world.
"I know of a billionaire", said George, "who was so convinced that ecological disaster was impending he purchased the equivalent of a private ecosystem in Mexico, but even he can not fully escape the fact that we all live in an increasingly crowded and polluted single family house, the only one we are ever likely to have."
A few facts indicate the nature of the problem:
- We are within a few years of losing 15-25% of the total of earth's biodiversity, but no-one really knows what that means in terms of the number of species lost because no-one has the faintest idea of how many species there are.
- In the last five years more than 300 new fish species have been identified in the Amazon region alone.
- Harvard biologists estimate that 50 species are being driven to extinction every day. Other experts put the figures much higher. Even on a conservative estimate, 20,000 species are wiped out annually.
- Probably as many one-fifth of terrestrial plants are threatened, and in the US about 3000 native plants are considered in short-term danger of disappearing forever. The situation is worse of course in the tropical countries, which are the biological superpowers.
- The scenario for the next couple of decades in the Latin American rainforests ranges from a best case loss of "only" 15% to a worst case estimate of a terrifying two-thirds.
Species have always been lost in the natural process of evolution. But scientists now believe that today's extinction rate is as much as 40,000 times its natural rate.
For example, "green revolution" type agriculture has forced peasant cultivators to abandon farming with self-
reproduced seeds which were the result of thousands of years of
natural selection and replace them by genetically identical and vulnerable standard varieties. As one observer has said, when peasants consume the seeds they have been convinced are now obsolete, the heritage of several millennia can disappear in a single bowl of porridge.
Homogenised global thinking and destruction of diversity are nowhere more evident than in the area of so-called development economics, in which it is considered that all economies must pass through identical stages on a single predetermined path of economic growth. In this process there is simply no account of history, of culture or of nature, which at best is there to be tamed or exploited.
Thus development professionals in places like the World Bank are highly skilled at thinking globally and experts at acting locally, forcing people to conform to their own view. In doing so, they do not just homogenise space, they telescope time as well.
The negative implications of homogenised global thinking are also revealed in cultural, intellectual and linguistic practice through the use of collective nouns like humans, species and particularly the pronoun "we", as in "we are destroying our forests", a familiar phrase of many bureaucrats, United Nations commissions and moralists.
We are almost never responsible for these crimes, and using the terminology only makes it harder to see exactly which people and which institutions are the real perpetrators, said George. "We" are not, for instance, destroying "our" forests; identifiable concession holders, particular logging companies and specific national or international policies and institutions like the World Bank are destroying the forests.
"Acting globally has become a practical necessity in a world where we are acted upon globally, where decisions affecting our lives are taken at levels so far removed from ordinary democratic practices that no citizen has a hope of influencing them." Clearly, as long as the ideology and practice of the so-called free market system prevail without being contested, the fate of the world hangs in the balance
The market does not give us the signals we as a society need to know, that we may be approaching ecological disaster.
The World Bank and the IMF found in Third World debt the perfect instrument to force the integration of the indebted countries more and more tightly into the world economy.
There is absolutely no hope for Africa to grow out of its debts through the export of commodities.
In 1982 the indebted countries owed $800 billion. Ten years later, having paid over $1300 billion in debt service, they owed $1450 billion.