Wednesday, January 23, 2008

The End of Growth

I was recalling today a conversation I had with a friend from my hometown over break. He is a British citizen whose family moved to America about ten years ago, but he still maintains close ties with Britain. We spent some time talking about politics, economics, etc... One thing he said really stuck out.

He agreed that capitalism is the best economic system to promote growth, but he then said that he would rather see higher taxes and more socialism because we're at the point where we don't need to grow anymore.

I immediately countered with the fact that we have no cure for cancer, and he relented that growth in medicine was still necessary, but then we both just kind of dropped it. I would add to my argument that with the constant concerns over global warming, we certainly need growth in all the processes that cause pollution.

Growth, and its potential results, are unknowable by their nature. Will there ever be a point where we no longer need growth? I'd answer with a resounding "no."


Zachary Piso said...

Martin Luther King had an remarkable articulateness regarding the concept of "growth"--

"This does not mean that we must turn back the clock of scientific progress. No one can overlook the wonders that science has wrought for our lives. The automobile will abdicate in favor of the horse and buggy, or the train in favor of the stagecoach, or the tractor in favor of the hand plow, or the scientific method in favor of ignorance and superstition. But our moral and spiritual 'lag' must be redeemed. When scientific power outruns moral power, we end up with guided missiles and misguided men. When we foolishly minimize the internal of our lives and maximize the external, we sign the warrant for our own day of doom."

I also care to note this quote, also from The World House...

"When machines and computers, profits motives and property rights are considered more important than people, the grant triplets of racism, materialism, and militarism are incapable of being conquered."

There is a book by Ray Bradbury that I always think of when this question is asked, the last short story of the collection "The Martian Chronicles". Basically, there is a point that more growth does not improve the lives of people. This is much like the age old economic dilemma that increased wealth does not bring increased happiness.

I ask you Pete why you believe capitalism will lead to a cure for cancer. It hasn't thus far, and I've grown to accept American capitalism has progressed from optimistic youth. The argument for competition is logical, but honestly I expect more from mankind-and hope that curing cancer would be a greater incentive than exorbitant costs that would exclude the poor from such a cure. Be as cynical as you may about human nature to retort this, but the cure for cancer is canonized as the epitome of humanitarianism, so it is no ordinary example of wealth being the chief incentive.

Lets say we socialize medicine. In doing so we may delay a cure for cancer (I'd argue no such cure exists because of the nature of the illness). But at the same time millions would receive better health care, the standard of living would increase among the poor, and countless lives would be saved.

I've felt oddly serious in this post, so I'd like to reference a favorite comedian. Capitalism it seems, has driven some of our scientists to invent the seedless watermelon. "Forget curing cancer. I know thousands are dying needlessly, but this -spit-this needs to stop".

Zachary Piso said...

And to address the environmental comment. Capitalism in the form of thoughtless industrialization is what caused this problem. Wealth as a form of status is what drives people to buy Hummers, among other SUVs, that contribute countless tons of CO2 into the atmosphere daily. Yet capitalism is the cure for pollution? Definitely not. Government regulations are the need for these improvements. While incentive driven programs may help, they are a gross example of paternal nihilism, where working with the system actually does more damage than good.

Honestly, I'm not sure what you mean by growth in this regard. Capitalism hasn't been doing it, only regulations have, and that to me is the influence of a socialistic approach.

Pete Abbate said...

I doubt we'll ever have a definitive answer on money and happiness, although I tend to believe that more money buys things like better quality food and better preventative medical care, which leads to happiness. I can't say that capitalism is perfect and maybe it means I am a cynic, but I trust man's desire for personal profit to motivate him more than his desire to help others. I think relying on selfishness is a sure thing, and relying on anything else instead is substituting a lesser motivation. Just because someone is profiting, doesn't mean they can't work for personal gratification - there are plenty of professors who have made more money than they'll ever need to live for the rest of their lives, yet they continue to teach and accept payment for their services.

To claim that socializing medicine will give millions better healthcare is highly questionable. I don't think you can assume that the same caliber of people will go into medical practice or research, because it is so demanding in so many ways (years of school, regular work on holidays, etc.), unless our socialized system continues to pay doctors extremely well.

Our current healthcare system isn't perfect and I'm not arguing that we should leave it alone. But I don't think that people come to America from other countries for difficult surgeries and/or elective surgeries because our medical care is lower quality than the care they could receive at home. So should we do something for the poor? Yes. But is government takeover of healthcare the answer? No.

By growth, I meant growth in the development of new processes of harnessing energy, fueling cars, etc. etc. And sure, regulations can help guide industries in certain directions, but if they're done poorly, then you're ensuring a certain mediocrity of production. I.E., tell companies they can produce this much carbon, and they'll always be producing that much carbon. But raise global temperature and soon you'll have processes that produce no carbon.

Before you start calling me names, I'm not suggesting that we roast the planet to get any action taken regarding global warming. But I am saying that my faith in capitalism comes from man's historical nature to find "gold in the garbage," as Rockefeller did when he realized that gasoline (a byproduct of cracking kerosene that was dumped into rivers) could be useful and set in motion the creation of the internal combustion engine. When rivers were regularly being set on fire, if we had said that companies were allowed to dump only x-amount of gasoline into the river, do you think there would have been no effect on the timeline of creating the engine?

Pete Abbate said...

Also, I'd be curious to hear your thoughts on this article. Here's a good excerpt:

"Population is an important factor. Carbon emissions in developing countries rise with population. For instance, if China holds population growth to near zero for the next couple of generations, it may do as much for the earth's atmosphere as would a heroic anticarbon program coupled with 2 percent annual population growth."

I'm not sold on the idea that SUVs are the root of all our problems with climate change.

Zachary Piso said...

Environmental impact, from the perspective of environmental scientists, is a function of the equation I = PAT, or impact = population x affluence x technology. Obviously these are somewhat subjective measurements, but its important to note that affluence and technology have a greater impact than population.

In fact, most environmentalists consider population control the least important factor of greenhouse emissions. Consider this table...

Per capita emissions of the US are highest in the world, and even total emissions are 50% higher than China, which has a population much higher than ours. Also, another country which is oft cited by anti-environmentalists as the source worthy of blame is India. The per capita emission of the US is 5.37 tons, while for China, .76; India, .29.

Also, bare in mind China has a Total Fertility Rate beneath the replenishing rate (2.1) Hence, China CANT do anything to stabilize the population. The only thing increasing it is demographic momentum, which is simply the younger generations (which are larger) filing up the population pyramid. The base of the period is not expanding, so this argument I find shallow.

(By the way, you misunderstand global climate change, evident in the posting "...But raise global temperature and soon you'll have processes that produce no carbon". I don't mean to sound condescending, but you have to understand positive feedback and how even a slight, noticeable difference ends the hopes of reversing the process)

Lastly, I agree that competition keeps and makes good doctors. However, I'm more concerned with your approach toward capitalism being that of blind faith. Religion and capitalism often go hand in hand during the evil examples of human behavior (slavery, imperialism). Pure open markets are not always the answer, and you are sometimes starting with that concept as a postulate.

caleb said...

Although both of you present valid points and facts about the environment and socialized medicine, you seem to stray from the main idea/original comment. To my understanding, the discussion is that of wealth as a means to happiness, which is a highly opinion-based and controversial issue.

I disagree with the statement that there is no point at which economic progression will reach its pinnacle (I assume you mean economic growth, because otherwise there is no real argument). To make such an assertion is to assume that people are driven by amassing wealth and power/respect, which, again, is matter of opinion. Currently, society respects the wealthy. We look at millionaires and say, "they must have done something right." If societal sentiment was permanent then I would most surely agree with the above statement.

Fortunately, sentiment can change as evidenced by, an example used earlier, slavery.

Keynes states that economic prosperity will reach a point at which people will forgo monetary gains in order to pursue non-economic ventures. At this point he implies two things:
1. That all basic needs are met (meaning the lower levels of Maslow's hierarchy).
2. And that people's perception of a successful person changes to one of enlightenment and instead of wealth.

He says that the greedy/money hungry will be the minority and will be ostracized from society.

Of course, this change in sentiment is necessary before there can be a point where economic growth stagnates, but it is certainly not out of the question. It is my belief that such a point is inevitable, but it is an opinion and can definitely be refuted... Have fun :-)

Pete Abbate said...

I certainly guilty of defaulting to the market as the solution to all problems - there's nothing like a Mason education to drill that into your head. And slavery was an excellent example of a time when government regulation was really needed to effect change.

I still think if we're looking at population, affluence, and technology as the measurement of the impact of global warming, you need technology to reverse the trends. I can't imagine the population shrinking anytime soon, and I guess I can see the possibility of our affluence shrinking with the upcoming recession, but obviously we aren't heading back to horses and buggies anytime soon. So we need technology to be the big reducer in the equation - I suppose by government forcing us to ultra light and make hybrid vehicles (two of your favorite ideas, Zach, if memory serves me).

I'm still trying to decide how I feel about the societal shift from wealth to enlightenment as goals. If it happens, it will certainly hit Europe - and then the rest of the world - before it comes to America.

Compared with the totality of knowledge which is continually utilized in the evolution of a dynamic civilization, the difference between the knowledge that the wisest and that which the most ignorant individual can deliberately employ is comparatively insignificant. ~Fredrich Hayek in The Constitution of Liberty