Fair warning? The Club of Rome revisited
Almost thirty years ago a book was published which challenged one of the then core assumptions of economic theory - that the Earth was infinite and would always provide the resources needed for human prosperity. The title of the book said it all - "Limits to Growth". It was based upon the first research to make serious use of computers in modeling the consequences of a rapidly growing global population. Most of the scenarios pointed to a major economic crisis happening in the early 1990s. This is not what happened.
In retrospect, was "Limits to Growth" a fair or a false warning? We asked Keith Suter, a member of the Club of Rome since 1991, to talk about the club and that famous book.
In 1999, the price of petrol is the lowest it has been for over two decades, with large reserves of oil stored by governments and corporations. Many other commodity prices are also at very low levels. These present-day facts are all very different from the warnings issued in the early 1970s about a world-wide environment crisis and shortages of resources.
The cover of 'Limits to Growth' showing a globe in chains. (published by Earth Island Limited, London 1972)
One of the best known warning voices was contained in the book "Limits to Growth", published in 1972. It sold twelve million copies in 37 languages. Whilst the book did not predict what precisely would happen, it stated that if the world's consumption patterns and population growth continued at the same high rates of the time, the earth would strike its limits within a century. The message was that this outcome was not inevitable. People could change their policies - and the sooner the better.
The book was very controversial. Its note of warning jarred with the sense of optimism that existed at that time. The 1950s and 1960s had been a period of immense economic growth in both the Western and Communist worlds, both of which had a very low rate of unemployment. There was a general belief in the Western world that another 1930s-type Depression could be avoided as a result of government intervention in the economy. Additionally, it was assumed that there was a standard (Western) formula for economic growth that could apply throughout the Third World. All the West had to do was to win the Cold War and the future for the entire world was assured.
Very little attention had been paid to the environmental consequences of economic growth. Indeed, both capitalists and communists were convinced that there could not be much of an environmental crisis. For capitalists, the market would solve any environmental problem (for example, if resources were used too rapidly, then prices would go up and so usage would be forced down), and Marxist dogma assured Communists that technology could solve all problems.
Both political systems regarded criticism of their respective systems on environmental grounds as nonsense. Each said that "Limits to Growth" was alarmist and the book was branded as pessimistic and a threat to stable government. Although "Limits to Growth" sold well around the world, government policy-makers ignored much of the essence of the warning. It is true that the first ministries of the environment were established at this time and there were tougher environmental laws introduced. But both political systems remained committed to the overall idea that growth was good and that the environmental consequences could be solved by administrative, legal and technological measures.
The Club of Rome
"Limits to Growth" was commissioned by The Club of Rome, a thinktank of scientists, economists, businesspeople, international civil servants, and politicians from the five continents. The Club began in an informal way at the behest of Aurelio Peccei, an Italian businessperson based in Rome. In 1965, Peccei gave a speech on the dramatic changes taking place in the world, especially relating to science and technology. The speech attracted considerable attention.
Alexander King, who had not previously known Peccei, received a copy of the speech. King was a British scientist, who had been a scientific adviser to the British Government, and who was then at the Paris-based Organization for Economic Co-operation and Development (OECD), the organization of rich Western countries. King had similar concerns to Peccei about the commonly-held veneration for growth that allowed little thought for any long-term consequences, and decided to meet Peccei to see how these ideas could be followed up.
'Limits to Growth' was full of complex graphs like this one, which predicted if global policy changes weren't changed by 2000, "Population and industrial capital reach levels high enough to create food and resource shortages before the year 2100." (p.169)
Peccei and King were not confident that either the market or technology could function as a way of solving environmental problems. After calling together groups of economists and scientists to discuss problems facing the world, they asked a group of computer experts at MIT in the US to examine what would happen if people continued to consume such a high amount of resources. This study became the basis of the "Limits to Growth" book.
The study had some obvious limitations, most of which stemmed from the use of computer modelling. This was the first time that computer modelling had been used for such an ambitious exercise. The success of such modelling depends on both the quality of data and the capabilities of the computer. In 1970, methods of data collection were still rudimentary. Many countries, for example, did not know the true size of their populations. There have been many improvements in national data collection but, even today, we are still far from getting all the data we need to produce accurate models. For example, there is debate in many countries on how to work out the exact numbers of unemployed people, with official statistics usually being lower than those of non-governmental organizations that work with unemployed people.
In addition, the quality of the model used was limited by the available computer technology and could only use a low number of equations in its construction. Computer modelling has now become more sophisticated with the far greater computer power that is available meaning that models have become more complex. However, computer modelling still leaves a great deal to be desired, as is evident with the failure of government finance departments to predict the size of economic growth in the coming years.
Leaving aside the details of the projections, there is the question of the essence of the warning: is the earth approaching its "Limits to Growth"?
The Warning Remains Valid
The essence of the warning from The Club of Rome remains valid. First, there is more to the warning than just a drop in commodity prices. The drop in the prices of oil and other commodities is more indicative of their reduced demand, rather than an indication that people are making do for longer with less. Their demand will be increased when, for example, the Asian recession ends, and so the price will again increase.
Second, there are already situations where resources have been reduced. For example, large proportions of the world's fishstocks have been overfished, some perhaps terminally. There are too many fishers chasing too few fish: the world's fishing fleet could be reduced by 50 per cent and yet the same amount of fish could be caught.
Thirdly, the 1990s have been years of record weather-related disasters. While there is still some speculation among scientists about the extent of the climate change, insurance companies have already decided that there is a change underway.
Munich Re, one of the world's leading insurance companies, issued a report in late 1998 suggesting that large areas of the world, including the south-eastern US and Indonesia, may become virtually uninsurable in the years ahead.
|This graph from 'Limits to Growth' aims to show an inevitable global shortage of arable land in response to population pressures and urban growth. (p.50)|
Fourth, the Asian economic revolution is indicative of another global trend. In 1991, The Club of Rome published The First Global Revolution, which drew together many of the strands in earlier reports. It argued that the globe was undergoing its first simultaneous revolution. This is different from the Industrial Revolution, which began in Britain around 1750 and then gradually moved around the world; people had more time to adjust to its implications. This time, technological change takes place suddenly and simultaneously, with even less scope for preparation and safety measures.
As a result, many Third World countries are now charging ahead with economic development - but at great environmental cost. Ironically, the conservative influential British magazine The Economist, which remains a critic of "Limits to Growth", produced a supplement on "Development and the Environment" on March 21 1998 which showed the extent of environmental destruction in the Third World. The magazine warned First World countries to do more to help the Third World:
"If they fail, they will be risking not just the health of their citizens but possibly the health of capitalism too. People might start to assume, wrongly, that capitalism and foul living conditions are natural bed fellows..."
But as First World countries have got richer, so they have got meaner, with the result that foreign aid is now the lowest since records began three decades ago.
Fifth, "Limits to Growth" did not just call for a reduced level of consumption of resources. The Club has argued that humankind needs to re-evaluate its exploitative attitude towards humans and the earth itself. The failure to give more foreign aid is indicative of the increased selfishness of rich countries. Meanwhile, the world's richest 20 per cent of the population consume 86 per cent of its goods and services, over half its energy and nearly half its meat and fish. There is little indication that most of the world's richest people are willing to heed the warning from "Limits to Growth", they are too busy making the most of today.
Therefore, the reluctance to give foreign aid and help the Third World is in itself a reflection of the prevailing economic mindset: making a virtue out of selfishness. There is no doubt that the market system is the best way to create wealth (by encouraging everyone to look out for their own best interests). But the market system was not designed to share wealth or protect the environment - as even The Economist magazine is having to admit. So, as it stands, the market system enriches the wealthy, impoverishes the poor, and endangers the planet.
Finally, it is possible to win battles but lose the war. In other words, there may be improvements in some areas but overall the situation remains gloomy. For example, all countries now have ministries for the environment and much better environment legislation than existed in 1972. But the environment is still a new addition to the range of issues being addressed by governments. They still have not worked out how the environment fits in with issues of trade, national security, economic development and the other traditional matters handled by government.
For instance, governments still have no way of including environmental issues in their system of national accounts. This means that environmental disasters (like cyclones, bush fires and oil spills) are all calculated as additions to the gross national product because of the increased economic activity associated with the clean up and repairs.
Additionally, there are mixed signals from the voters. Green political parties receive some support but few such parties ever achieve power. Voters may think green but they often vote brown.
Anyone wishing to have a quiet life made a mistake being born in the twentieth century. The world is undergoing the biggest change since the Industrial Revolution began over two centuries ago, and the pace of change is increasing, not slowing down. People feel overwhelmed by change. There is a tendency for people to cocoon themselves in a culture of contentment. They often do not want to hear about the world's problems. Even when they acknowledge that changes in their lifestyle and patterns of consumption are required, they are unwilling to accept the challenge of those changes. This makes the task of encourage people to take action to build a saner and more sustainable world all the more important and yet all the more difficult.
To sum up, the warning from The Club of Rome remains valid. The British science writer H.G. Wells once said that life was a race between education and disaster. The Club went to the effort of issuing the warning not out of a sense that we are all destined to be destroyed in an environmental catastrophe, but in the optimistic belief that it is possible to build a better world and that humankind can be mobilized for that task.
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