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How Doomed Are We?

Since the average rate of population growth in underdeveloped countries now is at least twice as great as that in nineteenth- and early twentieth-century Europe, this correspondence seems loose. Beckerman offers the bleak encouragement that “when the Western world was passing through this phase there was no help from outside; there were no other richer countries to give aid and advice on birth-control devices.” But Europeans in the nineteenth century, although bereft of teams from the Population Council with intrauterine devices, were presumably more than compensated by the proceeds of their economic exploitation of the tropical countries which now aspire to a corresponding “Demographic Transition.”

Beckerman considers at some length the problems of natural resources. Here “safety mechanisms” proliferate, and we can see the strength of the optimists’ case. Beckerman describes what happens when a resource becomes scarce and its price increases. In the case of, say, copper, corporations spend more money, including money for research and development, on finding copper in difficult places and mining it from difficult sources such as low-grade ores and recycled copper scrap. Other corporations spend money and technological effort on using less copper and substituting other materials.

In any event, Beckerman shows, some materials become scarce a lot faster than others, and the exhaustion of a particular resource, “every scrap of copper or every drop of oil,” is not in itself a catastrophe. He describes some prospects for technical progress. People may need less copper, because “it is highly probable that telephone lines in future‌will all be made of glass fibers acting as wave-guides for laser beams.” He notes new ways of softening rock, the exploration of low-grade porphyry copper ores, and, “one of the most exciting new sources,” “the recently discovered manganese nodules that apparently litter the sea-bed.”

This vision of new solutions arising in response to “feedbacks” is impressive; the technological possibilities are as “fantastic” and “spectacular” as Beckerman writes. But the argument about resources raises more immediate questions. How efficiently do these feedbacks really work? Is there a need for reform of government policies toward resources, or toward the resource industry? It is here that the experience of the recent “resource crisis” is of interest.

Since Beckerman’s own judgment is that “automatic market responses” are likely to work well in the future, he sees no need for reform of public policy as it concerns raw materials, and indeed very little need for governments even to have such a policy. “Government intervention has been desirable only in exceptional circumstances, such as war‌. This does not mean that private industry always gets it right. It doesn’t, but it usually pays for its mistakes.”

Beckerman is no indiscriminate proponent of the free market, and he believes, for example, that government intervention is needed to preserve and protect the environment. His main argument of principle for laissez faire in resources is that there are “clearly defined property rights in mineral resources,” while “the environment is not clearly anybody’s property.” But Beckerman ignores the many “social” or public rights involved in questions about the use of resources, including the right to be spared the local social inconvenience of running out of some particular resource, whether it be copper or coal for an electric plant. He once speculated that “a fifth-century BC systems analyst would certainly have predicted the imminent end of the world by extrapolating the already growing shortage of timber resources and pointing to the overpopulation of Athens.” The discomfiture of these dead pessimists would not presumably do much to console Athenians of the third century as they surveyed the end of their local economic and political world, from the bare hillsides of the Peloponnesus.6

A considerable part of Beckerman’s argument about resources relies on his description of the way the free market worked in the past. But this sort of argument raises questions of method. He writes, “As a matter of straight fact, it has usually been the case in the past that however fast demand expanded and for however long, new mineral reserves were found (or some other painless corrective mechanism came into operation).” Painlessness in the past is however no guarantee of painlessness in the future, any more than the fact that chromium consumption grew at 2.6 percent a year in the past is a guarantee that it will grow at that rate in the future.

Beckerman concludes that “a prediction that took account of the preceding data on the way that resources have always matched demand in the past, however fast the rise in demand, would always have to indicate a similar capacity to meet demand in the future.” This is not too far from the sins of extrapolation for which Beckerman and others excoriate the environmentalists.7 As Beckerman himself writes, “What we want to know [is] the relationship between the growth of demand for the product in question in the future and the growth of supply of it, also in the future.”

In 1974, at least, the free market in resources looked disordered. Prices offered rather unreliable signals to entrepreneurs, and the atmosphere was thick with uncertain expectations and social costs. The price of many metals, for example, fluctuated wildly and the fluctuations had little relation to longterm or even to short-term economic conditions. Copper cost the equivalent of about $2,000 per ton on the London Metal Exchange in December 1973. By April 1974 it cost more than $3,000 per ton. Then the price of copper began to fall, and by December 1974 copper cost some $1,500 per ton.

One reason for these price changes was a large increase in the speculative demand for copper.8 Investors also held commodities instead of stocks or foreign currency. Meanwhile, the price of copper was believed to be affected by the elaborate relations among nations: hopeful commodity speculators learned in the business press that Japan, for example, was in 1974 selling copper which it had stockpiled in 1973 when it was trying to appease the United States by reducing its balance of payments surplus; they heard that the oil-exporting countries might also be stockpiling copper, perhaps as an investment and perhaps as a way of fortifying the OPEC-like cartel of copper-exporting countries.

In the vision of free market optimists, mining corporations are supposed to take account of these fluctuations as they look ahead in rational self-interest. They must consider the price of copper and the political situation of such copper-exporting countries as Chile and Zaire. They are also trying to decide whether to invest in the technology of mining low-grade ores in, say, the porphyry mountains of Maine. They consider the price of electricity and water in 1985, and the political situation of Maine. They have heard that the manganese nodules on the ocean floor contain one percent copper, and they wonder if Howard Hughes was serious about deep-sea mining. Through this fog, Anaconda Copper is supposed to find the path to the best long-term social solution. (Professor Kaysen’s view of prices will not be helpful here: “It is precisely their function to make smooth transitions possible as scarcities and demands change.”)

The issue of resources comes back to questions about political limits and about the real operation of feedbacks. It is not simply a matter of avoiding the sudden and global crisis of resources described in The Limits to Growth. If that were the only difficulty, it would be adequate to follow Beckerman’s policy of nonintervention and to rely on the invisible hand of the free market, or on the heavy hand of the resource extraction industries. But as far as more immediate difficulties in the use of resources are concerned, the optimists offer little guidance, beyond the conservatism inherent in reiterating that things might well turn out all right.

3

The politics of solving environmental problems are, unfortunately, at least as obscure to most environmentalists as to social optimists. The practical vision of the Club of Rome, for example, is concealed in rhetorical mystification. This mystification seems to be becoming yet thicker as the Club of Rome incorporates certain of the views of its optimistic critics.

In its newer pronouncements, the Club of Rome considers The Limits to Growth in a way that recalls Hazlitt’s comment on the second and extensively revised edition of Malthus’s Essay on the Principle of Population.

Mr. Malthus seems fully aware of the importance of the stage-maxim, To elevate and surprise. Having once heated the imaginations of his readers, he knows that he can afterwards mould them into whatever shape he pleases. All this bustle and terror, and stage-effect, and theatrical mummery was only to serve a temporary purpose, for all of a sudden the scene is shifted, and the storm subsides.

Having frightened away the boldest champions of modern philosophy, this monstrous appearance, full of strange and inexplicable horrors, is suffered quietly to shrink back to its natural dimensions, and we find it to be nothing more than a common-sized tame looking animal, which however requires a chain and the whip of its keeper to prevent it from being mischievous. Mr. Malthus then steps forward and says‌”As to the principle of population you need be under no alarm; only leave it to me, and I shall be able to manage it very well. All its dreadful consequences may be easily prevented by a proper application of the motives of common prudence and common decency.”

The Club of Rome acts out the same kind of pantomime. The Limits to Growth, an “exercise” and “a first attempt, crude and tentative as it may be,” according to the executives of the Club, raised “essential problems which, irrespective of the validity of the detailed findings of the study, may determine the future of society.” (Meadows himself suggests the theatrical character of his endeavor when he observes that if population, for example, is growing sufficiently fast, “You can put the physical limits anywhere you like and you’ll still get to them within a generation or two.”) The executives of the Club of Rome, presenting their Second Report, Mankind at the Turning Point, concede that

No doubt, the real limits to growth are social, political and managerial, and finally reside within the nature of man. In the Meadows model it was not easy to relate directly material problems with the political process or with changes in the value system. New tools were indeed necessary to allow for an organic socio-political-economic coupling.

In the Second Report, two more acolytes of “applied systems analysis” attempt to devise such a coupling. Their model is divided into ten regions and six strata. (Geophysics Stratum, MIC, MAC, and so forth. After all, as the authors observe gravely, “It is essential to acknowledge the fact that the world community consists of parts whose pasts, presents and futures are different.”) Like the optimists, with their “feedbacks” and “adjustment mechanisms,” these analysts are resolute in trying to describe the behavior of people as the interaction of “systems.” People become forces, in a heroic attempt at the inverse of anthropomorphism.

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    Beckerman is so contemptuous of the “eco-doomsters” that he is sometimes careless of logic, as when he endorses the following nonsensical proposition of a fellow optimist: “If the population of the world appears to be increasing exponentially, or if its consumption of iron ore or its production of disposable bottles seems to be increasing exponentially, it requires no flair for prophecy but merely a simple understanding of the differential calculus to know that exponential growth will sooner or later be replaced by some other and more moderate law of growth.” The differential calculus, of course, has nothing to do with the rate of growth of population. As Beckerman himself has observed, “Logical mathematical analysis by itself—i.e., without any empirical content—is quite unable to tell us anything about the behavior of the real world.”

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    Beckerman also, I think, underestimates the extent to which the positive feedbacks of the past have been fortified by government policies and attitudes. He is sarcastic about the gloom of early alarmists. But as he himself writes, “In 1908 President Theodore Roosevelt was alarmed at the impending exhaustion of mineral reserves in the USA, and called for a survey of resources which soon turned up many more reserves.” (My italics.) It seems possible that the reserves would not have turned up so easily without Roosevelt’s surveys. Beckerman also chides the “Paley Report” of 1953 (the President’s Materials Policy Commission Report). Yet the reforms recommended by that commission—in the operations of the US Geological Survey and the Bureau of Mines, the improvement of timber practices, the establishment of stockpiles of strategic materials and of an oil reserve—certainly contributed to the painlessness of the US materials economy in the twenty years after 1953. No doubt some modern readers of the report might wish that the commission’s recommendation for a federal energy agency to be concerned with the “long range energy outlook” had been implemented as expeditiously.

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    The volume of trading increased much faster than the industrial demand for copper. The relation between speculation and price instability is described in the OECD Economic Outlook for July 1974 and in a new UNCTAD study, Speculation and Price Instability on International Commodity Futures Markets. (TD/B/C.1/171)

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