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Unsustainable Predictions

April 3, 2001

While in college during the early 1970s, many of my professors gave me a large dose of gloom and doom about the future. In a religion class, we read Robert Heilbroner’s An Inquiry into the Human Prospect, in which the good professor predicted that the end of industrial society was imminent because the world was quickly going to run out of resources.  

My high school chemistry teacher convinced me to purchase Paul Ehrlich’s 1968 "classic," The Population Bomb, because Ehrlich supposedly had a real handle on the future, depressing though it might be. (The first line of this book declared, "The battle to feed humanity is over." Worldwide famine, Ehrlich declared, had won.)

Of course, I am still waiting for The End—as Heibroner and Ehrlich described it—to appear. Being wrong, however, apparently has not damaged their credibility with journalists or economists, given the worshipful tones they use when speaking their names. Even though our economies—and population—have continued to grow rapidly since the mid-1970s, predictions continue that The Last Days are just around the corner, and many people still believe them.

While listening to National Government Radio recently, I heard a cheery spot about a "sustainable development" program at a nearby college here in South Carolina. Students and faculty members, it seems, are joining forces to demonstrate how sustainable development can take place within a "college community." Of course, the term "sustainable development" carries the implication that economic development in the real world somehow is not "sustainable."

Heilbroner outlined this way of thinking in Inquiry in 1974:

Ultimately, there is an absolute limit to the ability of the earth to support or tolerate the process of industrial activity, and there is reason to believe that we now are moving toward that limit very rapidly.

He then "projected" that if world industrial production were to continue to grow at its current pace for the next fifty years, it would mean resource demands of one thousand times what they were in 1974. This is all simple math, of course, but it paints a very silly picture of how human beings act. Heilbroner’s predictions are like the scene in the movie Animal House, where a band marching down an alley into a wall does not turn around, but rather tries to strut forward as though the wall were not there.

Heilbroner contended that such growth could not be sustained at that level of resource use, so economic growth inevitably would have to stop very soon into the future. Although it is unlikely that religion professors are forcing their hapless students to read Inquiry these days, the Gospel of Heilbroner and Ehrlich lives on in another movement—the push for sustainable development. This latest wave of wrongheaded thinking is not just confined to a small South Carolina college.

The gist of the various sustainable-development moves around the nation, whether they are part of the overall program of control by the central government or something heard at the local zoning board, is that the present trends of economic growth cannot be sustained over time. 

For example, during his failed presidential campaign, Al Gore repeatedly claimed that the U.S. was rapidly losing farmland and that, if that trend were to continue, we would have to import food and be at the mercy of some sort of culinary OPEC. Gore was not the first person to sound such alarms regarding the disappearing farmland phenomenon; it has been part and parcel of the environmental gospel for many years.

One gets a mental picture reminiscent of the Animal House band: famished Americans building the last $250,000 house on the last parcel of farmland, with the buyers occupying their new home just before they die of starvation. Yet, this is precisely what many Americans seem to believe, and the problem seems to be getting worse, as more and more local government boards are inundated with "urban planners" who have been saturated with this stuff during their undergraduate and graduate studies. Once indoctrinated, these "planners" then are let loose upon the general public in an effort to convince us that the only way we can enjoy a decent "quality of life" is for government to order our every move.

One of the things that seems to be "understood" in this sustainable-growth movement is that a price system is meaningless. Prices, in the minds of these planners, are simply arbitrary obstacles to a better life for people. In reality, of course, the outcomes of policies that ignore the price system are  higher prices and a lower standard of living.

In a free market, prices reflect the demand for a product and its relative scarcity. As competent economists long have noted, prices determine the direction of the market, what will be produced, and how much will be produced. Prices also reflect who is willing to give up the most for these goods. Eliminate a price system, and it is the economic equivalent of a ship trying to sail without a rudder. What remains is chaos.

California, for example, has attempted to impose "sustainable development" in its policies restricting electricity production. When demand soared even in the face of low production, the California legislature then slapped price controls on the retail sale of electricity. The logical outcomes of such actions are apparent even to those with only a cursory knowledge of economics: Legislatures cannot produce scarce goods like electricity simply by issuing threats.

A free-market system permits the relative scarcities of goods to be brought in line with the demand for them. The system deals not only with the present but also with the future. Without prices, it is inevitable that a good will be either over- or underutilized. There really is no middle ground. 

Given pressure from consumer/voters, for example, the temptation for government is usually to overutilize a good. That is why people are "loving" national parks to death and why subsidized sugar farmers in Florida have been systematically destroying the Everglades. In both cases, the price system is subordinated to political distribution of goods, and the outcome is always predictable.

Sustainable-development advocates, however, have also been demanding deliberate underutilization of goods in order to "preserve" things for the "future." A case in point is the prospect of drilling for oil in the Arctic National Wildlife Reserve. Because the U.S. Government owns the land, it is nearly impossible to make an accurate economic determination of whether or not oil companies should drill for oil there. Ultimately, the decision to drill for oil will be decided by whichever group controls the most votes in Congress.

Ludwig von Mises understood well the chaos that erupts when government attempts to take control of those processes that are best left to private property and markets. Socialism, he said, is a poor substitute for the free market, and it will quickly break down.

Those who would advocate sustainable development claim that the free market does not adequately differentiate between present and future needs. Conversely, those same advocates hold that they possess clairvoyance when it comes to understanding the future. 

That, of course, is nonsense. Those blessed with such omniscience certainly have demonstrated their keen gifts by taking full financial advantage of them. Instead, it becomes painfully obvious over time that "sustainable development" is nothing more than yet another ploy for the blind to control the lives of those fortunate enough to still have their eyesight.

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William Anderson (send him mail) teaches economics at North Greenville College. See Anderson's outstanding Daily Article Archive . 

 


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