José Lutzenberger examines the way that economists measure wealth
and concludes that the gauge is both seriously warped and ultimately dangerous.
Wealth and social progress are defined by growth and growth is measured by ‘GNP per capita’, an overarching concept which masks the short-term destructive impact of growth on the environment and on people. Instead of growth as a goal, a green economy would focus on improving human welfare, broadening the concept of wealth and organizing the production system to meet everyone’s needs.
Today we find ourselves in an absurd situation. Twenty per cent of us, mostly in the so-called First World but also the rich elsewhere, live a suicidal lifestyle that is simply not sustainable. There is hardly a patch on this Earth that we are not yet in some way exploiting or getting ready to exploit for our orgies of consumption. We are messing up all life-support systems and this cannot continue much longer.
Yet all our economic thinking is based on the premise that the whole planet should develop like the US or Germany. ‘Progress’ is measured by what economists call the Gross National Product (GNP). GNP as a measure of progress is the most stupid, the most absurd and the most pernicious index that could ever have been thought of by a discipline that calls itself scientific. GNP was originally meant to be only a measure of total income; therefore it is the sum of all the money that flows in an economy, without asking why that money flows or what causes it to flow. Whenever money changes hands somebody has an income, though this says nothing about what that income is for. As used today it is nonsense. When robbers and bandits cause money to flow it also increases GNP. When a plane crashes, say a 747 jumbo-jet, that moves more than a hundred million dollars, the amount the airline receives from the insurance company. When the airline buys a new plane, the GNP grows by the same amount again. And if there are survivors all the medical and healthcare costs will also increase the GNP, as will the bills of the undertakers who bury the dead. So the more accidents and calamities we have, the better.
Here’s another aspect. Suppose you are the owner of a pub and you buy a barrel of beer at a price X. After you sold the beer to your customers you had a turnover of 2X and you had a lot of expenses, too. A sane business person would take the 2X minus X and then subtract all the expenses. Whatever is left would be profit. But what do governments do? They add the X (the cost of the beer) plus the 2X, the income from it, plus the expenses. They add everything because they start with the idea that every time money changes hands, somebody gets an income. But they don’t ask what that income is doing to the economy. I might as well, if I am the owner of that pub, buy beer at 2X and sell it at X. I would have a high turnover and would feel great. Unfortunately I would be broke. And this is the kind of calculation that most governments make.
Today in my country, Brazil, we are flooding thousands of square kilometres of pristine rainforest to make electricity for three mills that export aluminium. In our national accounts the foreign earnings from exporting the aluminium are added to the GNP, but nowhere do we deduct for the permanent loss of the ore or the demolition of the mountains. In another operation 100,000 square kilometres of forest were destroyed for charcoal to make pig iron for export to Europe. And nowhere do we deduct anything of that sort from our national accounts.
So I would say we need a completely different index to measure progress, one that takes into account losses as well as gains in national wealth. When we make a new superhighway and cover thousands of hectares of agricultural land with pavement we need to deduct that from our capital, including all future productivity lost. In my business I add up all my income plus my existing capital and deduct all my costs and my depreciation. I have tractors and trucks and cranes. When a machine breaks down I deduct it from my capital; as my machines age they are written off. But there is no write-off in our national accounts. Every country today is poorer than it was ten years ago. The irony is we all consider ourselves richer.
JOHN MAIER / STILL PICTURES
According to present economic thinking the economy is only healthy when it grows. An economy that doesn’t grow is sick. But how long can something grow? It is really incredible to see that what economists and public administrators call growth is mostly demolition – the demolition of nature, the demolition of life-support systems. In Holland, for example, about 20 per cent of the country is covered by buildings and pavement and that has doubled in the last two decades. When I first saw Amsterdam – that was in the early 1950s – it was a marvellous, beautiful city. Today when driving from Amsterdam to the airport there is a stretch of 20 kilometres of the most ugly type of development, big factories and supermarkets. Thousands of hectares of previously productive farmland are now gone. How long can this continue? How much growth can there be before there is no more place to grow crops to feed people? Twenty per cent? Forty per cent? Eighty per cent?
Added to this is the new doctrine of globalization. Everything must be produced where it can be produced cheapest. If pencils can be produced cheaper in Australia than in Holland, then the Dutch should import them from Australia. And everything should be available everywhere. We in Brazil already buy Dutch beer and the Dutch buy Mexican beer. The basic philosophy of this new religion is never explicitly stated. All previous great religions and political movements had explicit doctrines, explained in their catechisms, holy books or manifestos. But modern industrialism has no prophet and no holy book. It is presented only implicitly, in everything that politicians say, yet everyone accepts it as common sense.
When I was a young man in the 1940s, my home town of Porto Alegré in southern Brazil had 300,000 inhabitants. We had no slums. Workers at the time lived a modest life. They were not rich, they were humble; but they had their own pride and a satisfying life. They owned their own house, usually made of wood and they owned their own lot. Then at the beginning of the 1950s there appeared almost overnight what we called the ‘villages fallen from the sky’. They were slum communities that began to spring up everywhere around the edges of big cities. Almost no-one in government is questioning the economic thinking that led to this sad situation.
Worldwide, over the last 50 years several hundred million people have been driven off their land as a result of industrialization and modern agriculture. Today there are nearly six billion people in the world and about three billion are still rural, living in traditional social structures. If globalization of the economy continues another billion people may be uprooted over the next 20 years, with unforseeable consequences in terms of social havoc.
Recently I spent a week in Austria where farmers told me how scared they are of the European Common Market. They know thousands of Austrian farmers will lose their farms due to cheap food imports. And in fact this is already happening. In the Moselle Valley, in Germany, you can see vineyards turning to scrub on the higher slopes. When you talk to the old people who are still harvesting, they say: ‘When we retire our children will not be able to continue.’ Traditions hundreds of years old are disappearing.
We must realise that all these new free-trade arrangements, NAFTA, GATT and so on, were not made to benefit ordinary people. They were conceived by the powerful for the powerful. Transnational corporations need global markets, not only to get cheap resources from the Third World, but also to destroy within their own countries the social conquests of their workers. In Mexico, the Indian peasants in Chiapas who rose against NAFTA know they will end up in urban shantytowns as soon as Mexican borders are opened to the products of American agribusiness. American industrial workers also protested against NAFTA because they know that, with increasing misery in Mexico, American jobs will be exported there.
All over the world today, long-established communities that grew organically, that are ecologically sustainable and that give people a feeling of belonging and meaning are being torn apart. Whether they are peasants, artisans, rubber tappers in the Amazon or indigenous people, they are all being disempowered, demoralized and uprooted. When the Indian peasants in Chiapas have to give up, it is cultural genocide. Every one of those Indian cultures in Mexico speaks a different language, has different traditions, different dances, different music. When they leave, their land is taken over by cattle ranchers and their culture is gone, the language is gone. And a language that disappears is like a species that disappears – it will never, never come back. It is the accumulated wisdom of thousands of years of human history, just as a species is the accumulated wisdom of millions of years of natural evolution.
RON GILLING / PANOS PICTURES
Today most governments bow to the wisdom of the marketplace. It is true that the market is a good mechanism to find balance between opposing interests. But the market must be complete; all interests must be present and it must not be allowed to be manipulated, otherwise it is blind. Consider the fellow who lives with his family on the sidewalk in Calcutta and whose only wealth is his loincloth. He has tremendous necessities, but he has no money, therefore no demand. There are billions of people who have tremendous necessities, but they are not present in the market.
The market is also blind to Creation. The symphonic process of organic evolution that put us here has taken three billion years. And we are but one species among I don’t know how many millions – all of them important for the functioning of the living planet, Gaia. Never in the history of life has there been anything like what is happening today. Every year thousands of species are being lost forever.
And we call this ‘progress’. But how can this be? Shouldn’t progress mean increased well-being and harmony and a feeling of belonging for a growing number of people in a more sustainable and more beautiful world? If so then what we witness today has nothing to do with progress. I suggest it’s time to redefine what we mean by progress and what we mean by development.
We need to rethink the fundamental tenets of our economic system. But we must go much, much further. Modern industrial society is based on an absurd worldview, a worldview that we inherited from our Judaeo-Christian past. We see ourselves destined to conquer and exploit nature when in fact we are only part of it. It is now time to abandon this anthropocentric view and look to the values in many of those cultures that we call backward. We must learn to look at Nature, at Creation, as something sacred of which we humans are only part – or we will have no future. We need a new, actually very old, holistic ethics, an ethics of reverence for Life in all its forms and manifestations.
José Lutzenberger is an ecologist and former Brazilian Minister of the environment.
©Copyright: New Internationalist 1996