United Nations adopts Malthus and Galbraith

This year’s issue of the United Nations’ annual World Economic and Social Survey, titled The Great Green Technological Transformation, is an assemblage of all the trendy green platitudes of our times. The report is full of ‘broken window’-style economic arguments, disregarding opportunity costs and knowledge problems, not to mention public choice considerations. But what is particularly annoying is how uncritically the UN authors adopt the anti-growth mindset of the Neo-Malthusian camp.

The Great Green Technological Transformationis not actually an anti-growth pamphlet. Rather, the UN authors manage to simultaneously present green industrial policies as the great engine of future growth, and to question the desirability of growth itself. Of course, the authors tread very carefully here. Growth scepticism is mostly presented indirectly through quoting or summarising the work of others. When a growth-sceptical statement is not attributed to somebody else, it is mostly in the subjunctive. To give you a flavour:

‘[I]t may be necessary to impose caps on energy consumption itself in order to meet climate change mitigation targets in a timely manner. Proposals to put limits on economic growth can be viewed in this context.’

Yet what are we to make of a report which draws on all the usual suspects – the Club of Rome, the Brundtland Commission, the Sustainable Development Commission etc. – without even mentioning that these positions are disputed? How about a reference to Julian Simon or Bjørn Lomborg?

Hostility to growth rests on two major assumptions. Firstly, there is the Malthusian notion that our economic activity is already overstretching the planet’s ‘carrying capacity’. Secondly, there’s the Galbraithian notion that too much material wealth is not good for us anyway. What is frustrating is that the UN report adopts not just the first of these assumptions, which has become the mainstream view anyway, but the second one no less:

‘Voluntary1 limits to growth would be beneficial for developed countries themselves, because a further expansion of the current pattern of consumption would damage the quality of life rather than improve it. [...] For example, taking life expectancy as an objective measure of the quality of life, it can be seen that life expectancy does not increase much beyond a per capita income level of about $10,000.’

This is a standard phrase from growth opponents, but its relevance is extraordinarily dubious. Let’s consider an analogy: up until well into the 20th century, there was a strong correlation between a country’s real GDP per capita and the average height of its inhabitants. In the 18th century, the average North American was taller than the average north-western European, even though they were made of the same stock. At some point, this relationship must have disappeared. Remaining height differences in the developed world must be due by genetic factors. But what if somebody drew the conclusion that economic growth was no longer desirable, because it no longer makes us any taller?


1 By ‘voluntary’, the UN means ‘government-imposed’. It is ‘voluntary’ in the sense that it is not forced upon a country by external powers.

 

Niemietz’s second point is reminiscent of President Obama’s assertion before an American audience in Quincy, Illinois in late April 2010: ‘I do think at a certain point you’ve made enough money.’ Given the discrepancy between salaries and benefits that are enjoyed between the public and private sectors of the economy, the above mentioned $10,000 ‘contentment’ ceiling would prove a provocative baseline for austerity measures, wouldn’t it?

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