Tuesday, October 16, 2007

Choking on Growth, or Choking on Bad Government

In a recent NY Times Series, the issue of the environment and economic growth in China has come into question. Just the standard fallacy of blaming capitalism at work here. The only next-step fallacy is to blame open-market economics for the abhorrent degradation of the environment that is the current tragedy in China. What a shame. There is a clear political impetus for a change in environmental policy in China, but that movement has no voice in the political process because of the over-extended will of an oppressive state. The unfortunate part of the whole situation is that for this movement to gain critical mass and momentum, the only solution is to continue to grow economically. Historically, economic growth has been the primary engine for a change in social conscience. During the Industrial Revolution, even as conditions grew better and the average Englishman's lot improved, issues of poverty, education, child labor, and even the environment became more and more scrutinized, whereas in continental Europe, many of these conditions, while far worse in their relative magnitude to the same conditions in England, went ignored because the political systems were largely authoritarian or monarchic. In such cases it takes revolution and collapse to correct the system, which will probably be necessary in China today.


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  2. This is something I've been wondering about. From what I see back home in Calcutta, for the last decade or so, the city has been expanding into the wetlands that surround it. (There is nowhere else to expand.)You could blame migratory pressure, but it so happens that that the shiny new apartment blocks going up house the urban middle class, not the displaced rural labor. This leads me to wonder if the government can do something. Would it help if the state took some effort to develop satellite or other townships where some industries could be relocated?Some of the population pressure would undoubtedly decrease. But to make this happen, the state has to invest in developing infrastructure in the satellite towns - schools, hospitals, roads etc. Can private investment be depended upon to provide social overhead capital? And this is where I'm risking ridicule, if the state can play a valuable role, wouldn't a totalitarian regime like China find this easier to implement the investment policy than a democracy like India?

  3. What I've been thinking about for this point was the pollution etc. that has some correlation with the growth. Also, the issue of the environment cannot be entirely divorced from the issue of urban migration. Ani raises because many of the effects of environmental degradation (air quality, water potability, etc.) are magnified in concentrated populations.
    If we think of environmental qualtiy as a "public good," then we have a sufficient argument to fit it into a "collective action" problem, which justifies some role for an active and responsive government. In the case of China, I would argue that the government has been particularly ignorant to the collective will of its 1.4 billion citizens compared to that of, for example, India. The point here is that, in the words of Winston Churchill, "Democracy is the worst possible system... except for all the others."
    The real question I raise is, "Is growth the main problem?" or, "How would the current problems compare to the problems we would face without the growth we have witnessed to date?" Would the earth be able to support 6 billion human inhabitants? Would the length and quality of our lives be as good? I doubt it. Ironically, growth may be the only way to push the issue-- as people are more comfortably fed and clothed, social issues become more important on the margin, and more worth pursuing, leading to political and social change.

  4. excellent summing up. Indeed, the sole reason why neo-Malthusian scare stories aren't scary is that they somehow ignore the role of the "growth miracle". But let's move on from migration. Is it true that investing in environment-friendly growth paths is a luxury that LDCs can ill afford? Of course, I'm assuming that balancing the growth of per capita income and the preservation of environmental quality (however you measure it) is more "costly" than pursuing either of these objectives in isolation.