The Land Rant
We are pleased to present the newest of the "Land Rant" series of provocative essays created by the Henry George Institute. Let us know how you like it.
by Lindy DaviesIt's our job to refute the forces of fallacious Malthusianism wherever they arise. Somebody has to do it, because too much is riding on the public acceptance of their illogic. These people would have you think that "sustainability" is a more pressing need than, say, providing safe drinking water and sanitation facilities to the two billion people in the world today who do not have them. They would tell you that the perilous by-products of "economic growth" threaten our planet so gravely that our first imperative is to learn to live with less. The poor already live with less (they are, of course, with us always). Unfortunately, though, there are too many of them and they breed much too fast: another awful kind of "growth" that we must arrest. Less is just gonna have to be more, folks!
Statements like those are often made by credentialed people, who ought to know better. Sensible discussions depend on the currency of certain basic ideas. In physics, for example, massive bodies attract; entropy tends to increase. You could argue against these things all across the raving plains of USENET, but you'd be wrong. So in the interest of avoiding tiresome repetition, let's review a few of the basic concepts that bear on economic growth.
What's the economy for? "Making money for me, me me"? Well... perhaps not. Is it for "from each according to his ability to each according to his needs"? Evidently not. What the economy is for, in the final analysis, is very simple: the satisfaction of human desires. People once earned their satisfactions the old-fashioned way; desiring to be warm, they would kill and skin a furry animal with their own hands. They soon discovered that trading is a much more efficient way to go about it; more desires can be satisfied much more easily that way -- but, of course, that does not change the economy's fundamental purpose.
Who is the economy for? Unless we subscribe to some racist theory of Divine Selection, we are compelled to realize that the economy is for the satisfaction of all human desires: the desires of all human beings. But some people are less able to satisfy their desires than others, aren't they? Why is that? Because they are lazy? Addicted to drugs? Morally degenerate?
Well, there are probably at least as many rich people as poor people who are lazy, addicted to drugs or morally degenerate. But leaving that aside, if we cure all the drug addicts and save the souls of all the moral degenerates, we are left with the (far larger) total of people who cannot get access to the basic resources they need to make a living for themselves. And these are, not incidentally, the people whose birth rates are rising the fastest.
We need economic growth -- not only to feed and house these people, but also to take away the underlying causes of their unsustainably high birth rates! When there is no social security, people have more children to increase the chance of being cared for when they are old. When life expectancies are short and infant mortality rates are high, people have more children because they expect fewer to survive. In poorer communities there is more religious dogma, less education, and thus less understanding of birth control. And when people live by subsistence farming, more children provide more labor for the family's livelihood. All these tendencies work together to make a kind of "tragedy of the commons": individual poor families benefit from having more children, even though collectively everyone is hurt by it. But take away the underlying condition of poverty, and these causes vanish. Economic growth can help do that.
Which brings us to the next question: in "economic growth", what is it that's growing? The output of stuff from assembly lines? The volume of free plastic toys handed out by fast-food restaurants? The proportion of carbon dioxide in the atmosphere? But hold on. Let's recap: What is the economy for? The satisfaction of human desires. Whose human desires? All humans' desires. If we think for a moment, we will see that those examples may not represent economic growth at all. The assembly line (probably in China, in this case) stamps out high-quality plastic toys that probably have a higher market value than the "loony lunch" that they come with; the fastfood place gives them away to further bloat its market share; their manufacture adds to greenhouse gases, as does the exhaust of the car used to drive to that infernal place. The cost of getting rid of the wastes generated by the provision of "loony lunches" is more than what you pay for a loony lunch.
What is a "cost", anyway? What does that mean? A ticket you hand over in exchange for a loony lunch? Not quite. A cost is the opposite of a satisfaction: an encumbrance. Keeping in mind that the point of the economy is to produce satisfactions, we begin to see the formula for tallying up the true level of economic growth: The total of satisfactions, minus the total of encumbrances.
So: if more plastic toys made on Chinese assembly lines are imported to be given away with loony lunches in order to gain market share for drive-thru franchises, has there been economic growth?
Having a little trouble doing the math? That's understandable. The satisfactions in this example go to specific parties: the seller and the satisfied buyer. The encumbrances are spread over many, many people in small increments of time and space. That doesn't mean they're not there (billions and billions have been served, after all); it just means they're less easy to count.
But it's not impossible. If the encumbrances (costs) created are not charged to the satisfied parties, then they must be charged to the commons. To come up with an accurate tally of satisfactions and encumbrances (goods and bads) we must simply look at what common resources are being used, and what is being paid for them. There's the air, for one thing, soaking up the spew from SUV-pipes and plastics production. There's the municipally-maintained site where those plastics will rest for all eternity. There are public airwaves that carry the messages that made you want a loony lunch. There's the safe, smooth, taxpayer-provided road taking you there; there's the low-cost fuel provided by decades of federal subsidy. There are all the other parents who want to bring their kids there too, to burn off calories in the loony-land funhouse. There are all the local emporia, the tramping-through of which has made you hungry...
Somebody, somewhere, sitting in a chair, doing nothing at all, owns that spot -- rakes in rent for that piece of ground which all these things provided by the community, the government or the earth itself have made into the very best spot for major, on-going loony-lunch satisfaction! The more the economy grows, the more satisfied that landlord gets.
We asked, a while back, who the economy is for, and we said that it's for all human beings -- but it certainly doesn't look that way, does it? No, the way we've got it set up right now, it looks like who the economy is for is the owner of land! That's what's wrong with growth; that's what gives it a bad name, and gives Malthusians their specious ammunition. When we allow private ownership of the earth, of natural opportunities, we give away a free lunch that gets bigger and tastier with every bit of growth that we create.
Lindy Davies runs the Henry George Institute, the leading educational institution that teaches the ideas of Henry George.
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