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On Growth (1974)

On Growth

(1974)–Willem Oltmans–rechtenstatus Auteursrechtelijk beschermd

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64. Lincoln Gordon

Ambassador Lincoln Gordon is presently a fellow at the Woodrow Wilson International Center for Scholars in Washington, D.C.
Lincoln Gordon was born in New York City in 1913. He studied at Harvard University and received a Ph.D. at Oxford University in England, where he attended as a Rhodes scholar (1933-36).
He was a member of the Harvard faculty from 1936 to 1961. He was William Ziegler Professor of International Economic Relations at Harvard from 1955 to 1961.
Ambassador Gordon was involved on behalf of the State Department with the creation of the Marshall Plan for Europe (1947-52). In 1961 President John F. Kennedy appointed him ambassador to Brazil. He left this post in 1966 to become Assistant Secretary of State for inter-American affairs. From 1967 to 1971 Ambassador Gordon was president of Johns Hopkins University in Baltimore, Maryland.
Among the books he has published are Government and the American Economy (1941, rev. ed. 1948), United States Manufacturing Investment in Brazil (1962) and A New Deal for Latin America (1963).

A number of us here1 are engaged in a long-range project on what we call aspects of sustainable growth. We chose the title Sustainable Growth rather than Limits to Growth precisely because we had doubts as to the central thesis of the first Forrester and Meadows project for the Club of Rome. My own special concern is with international implications of problems of sustainable growth.

But let me say a few words as to what we mean by sustainable growth. We are concerned - as the Club of Rome has been concerned - with interrelations among population, resources, protection of the environment and rates and directions of economic growth. Unlike Forrester2 and Meadows, however, I do not share the conviction that economic as well as population growth must be stabilized within the next generation in

order to avoid global catastrophe at some point in the twenty-first century.

So far as the Meadows study itself is concerned, the critical analyses that I have reviewed and some work that I have done on my own convince me that their thesis is certainly not proven and probably not provable in global terms. The Meadows study is unduly pessimistic concerning depletable resources, unduly pessimistic concerning the possibilities of pollution control, and unduly pessimistic concerning the possibility that family-planning policy will in fact bring about lower rates of population growth even in countries that are quite poor.

 

Dr. Herman Kahn3 estimates that this planet could easily sustain twenty billion people at a per capita income of twenty thousand dollars each.

 

I am a long way from subscribing to that view. I think that a global population of twenty billion would in fact imply conditions of life and life-styles that would be very unpleasant for most of that twenty billion. And indeed, while making these very sharp criticisms of the Meadows conclusions, I would say on the other side that there can be and will be and to some extent already are serious physical constraints on economic growth in some countries already, while in other countries there is the prospect of temporary constraints over certain periods of time.

Serious present constraints show clearly in resource-poor and already badly overpopulated countries. I would cite as examples Bangladesh and Haiti, on two different continents. Temporary physical constraints in other countries or perhaps even globally are conceivable if technological developments in the energy field are delayed, either because science does not work sufficiently rapidly or because of environmental limitations on what is done or because of the wrong policy decisions. Then you could have periods of time in which there is a lack of fit between the ultimate physical possibilities and what is actually done by society. In short, there is a mixture of physical constraints and institutional and social constraints, which I think make it not only unlikely but impossible that Herman Kahn's dream could be realized.

But let me come to what seem to me more interesting questions than the mere problem of physical limitations. They have to do with the interaction between physical constraints and what individuals or societies want. If one takes just the United States, the environmental concern has caught hold not merely as a passing fashion or fad, but as a deep-seated, widely shared concern. This is clearly true in particular localities or

regions and may become true of American society as a whole. The general question arises whether people will want the mere expansion of conventional economic growth as measured by gross national product or GNP per capita. At present rates of growth in the United States, family incomes which presently average about ten thousand dollars would rise in seventy years to eighty thousand dollars per family at present prices. It is extraordinarily unlikely that anything like the present patterns of expenditure would still be desired, and major changes should be expected long before that figure is reached. Those changes would include the balance of leisure versus work, through shortening the working week very much more from the present average of about forty hours. Other changes concern the conditions of work, the satisfactions from work, the desire to spend one's working time in a more satisfactory way, and the use of additional available leisure. All of these kinds of changes are likely to slow down the rates of economic growth as we measure them conventionally. That is one major area which we are trying to explore in relation to the rich countries.

 

And what about the poor countries? You slipped in a phrase that was surprising to me. You said, if we look in the future and judge what individuals and societies will want. Would you believe that we approach the day, in view of the world's limits, that what individuals would want should be second to the interest of what societies need?

 

Let me speak first of the rich countries. Societies are composed of individuals. Clearly the consumption of the individuals is partly individual and partly social. There are many things that are collectively consumed. Environmental things generally are collectively consumed. Indeed there are - as others have pointed out - collective bads as well as collective goods. One of the changes in attitudes toward economic growth and consumption will be an increasing interest in collective consumption as opposed to individual consumption. That can be done partly through individual choice but largely requires social policy decisions, which means some kind of political process. We have some paradoxes at the moment in the United States. I interpret the results of our election in November, 1972, to indicate that on the one hand there is a great interest in improving collective consumption but at the same time a great skepticism that our instruments - our governmental institutions for providing collective consumption - really provide satisfactory results. Some solution will have to be found. I do not see the need for a sharp choice

between individualism and socialism. There are all kinds of mixtures in the present situation. The social component, which is the fraction of total decisions that is made collectively through political decisions, will continue to rise. I would hope that a very large area could also be left for individual choices. When speaking of both individual and social preferences, I mean individual preferences expressed through markets and social preferences expressed through politics.

 

I was thinking in Skinnerian terms of losing some of that cherished ‘freedom.’ We can now move to the developing countries.

 

Yes, I wanted to refer to what seemed to me at least preliminary indications of some significant changes of attitude to economic growth in some of the poor countries, particularly some of the poorest as in South Asia. I wish we knew more about China because that is clearly one of the most fascinating countries in the present world. If one is concerned with poverty, some kind of economic growth is essential in order to reduce the tragedy which flows from bad health, malnutrition and all of the other social ills of poverty one knows.

 

But are Chinese citizens not programmed in a way that all of the population has to be taken into account? We are all in the same boat trying to get to a higher level. We must stop wanting things that we totally don't need, that overtax our economies and financial resources, and - I didn't want to interrupt you -

 

No, this is a good interruption. Let's take the case of cars for a moment, because I think they're a marvelous illustration. Now we are back to the rich countries. Automobiles are an excellent illustration of some of the critical problems involved in the relationship between individual choice and social choice. If anything like recent trends continue in the United States, Europe, Japan, even in the Soviet Union, it's fairly clear that individual preferences would favor one car for each adult. Yet the effects of that happening are strangulation of the cities. At some point there develops - and there are signs of this happening - a collective preference for a smaller number of total cars.

Here you have a curious conflict which the market cannot take care of. Many of my economist friends believe that environmental issues generally can be dealt with through market devices by doing what they call internalizing external costs. They say that if pollution arises from

motorcars, the production of paper or electric power plants, all you have to do is to make sure that the polluter pays. The cost of curing the pollution or continuing the pollution should be added to the price of the product and then economic mechanisms will stop the pollution or bring it down at least to tolerable levels. I think that is true for many cases, but there are certain kinds of external social costs that cannot be internalized. Traffic congestion is a classic case of this type. The only way that kind of issue can be taken care of is by collective political decisions, specifically decisions that there will be built good mass-transit systems within cities, that there will be areas of cities which are forbidden to private cars entirely, that there will be better intercity transportation. All of these require very large investments of capital. There is no simple self-adjusting market mechanism that will do them. As technology gets more complex and as interdependencies, both within nations and across national frontiers, get more complex, I am convinced that the proportion of important decisions which must be made as deliberate social decisions will get larger.

To come back to China and the materially poor countries of South Asia: In a sense the Chinese model is what thoughtful people in South Asia are also thinking about in one respect, that is to say, instead of trying to promote economic development through what I might call the conventional path of industrialization, of intensive capital investment and the like, they would like to give emphasis to income distribution from the very start and to focus on the increased production of things needed by the mass of the people. That is to say, food for all, adequate nutrition for all, primary education for all, some kind of even rudimentary health care for all. As far as one can tell, China is in fact doing this. The great question is whether that kind of emphasis, in contrast to the more conventional type of development, can be translated into reality without a completely authoritarian brainwashing organization of an entire society. I don't know the answer to that question. I wish I did. I believe that in the next decade or so, perhaps sooner, we will see some interesting and important experiments under less authoritarian social systems to do that. I suppose that Professor Skinner4 would be very happy with the Chinese way of doing things. I am not happy with it myself. I would think that as China develops, more and more thoughtful Chinese would become unhappy with it too.

 

Has it not been demonstrated in most of the developing nations that blindly copying the platitudes of Jeffersonian democracy did not keep them out of the hands of authoritarian rulers?

I was American Ambassador in Brazil for almost five years, between 1961 and 1966; I know the rest of Latin America quite well. I do not believe that Jeffersonian or post-Jeffersonian-style democratic institutions can work in a full-fledged manner in very poor countries. As a matter of fact they really only work in a handful of countries in the whole world in North America, Northwestern Europe, Australia and New Zealand. What does seem to me possible is to combine a great deal more authority which implies less democratic participation in the selection and removal of governments, with more open societies and more protection of individual freedom and choice than China seems to be permitting at the present time.

 

Or in the Soviet Union?

 

Yes, of course. In Russia the tensions of a closed society are clearly visible. During my long stay in Latin America, I could see a clear distinction between the question of effective democratic control on one hand and the question of a reasonable degree of civil liberties, protection of individual rights, intellectual freedom and reasonable freedom of the press. Take the case of France under De Gaulle after 1958. He had to cope with a disaster in Algeria. Looking at it internally, results were achieved by almost an authoritarian regime. But that regime still did protect the rights and the interests of individuals and the essentially open character of French society. It was not complete as the system of radio and television was turned into a propaganda machine on behalf of the government. But the free press was maintained. Certainly French intellectuals were not persecuted.

 

I am almost inclined to say that in the present United States government under the leadership of Mr. Nixon and his chief assistant Kissinger, Congress seems to be completely bypassed. The US of 1972-73 seems to approach the way De Gaulle ran France.

 

On the side of foreign policy, I would not disagree with you.

 

Nobody knows anymore what is going on, the White House alone decides foreign policy.

 

This is true. The Congress is out of it, and I don't think that this is a healthy situation. Nor is it a very durable situation. It will change very rapidly. The Vietnamese war was an enormous national preoccupa-

tion and a source of national disillusionment. It will be settled long before your book is published. My own guess is that a settlement will be reached before January 20, because I am convinced that Mr. Nixon wants to have that behind him when he is inaugurated for a second term.

But to come back to some of the rich and poor nations' relationships: I am particularly concerned about romantic overexpectation. What often is implied in the planetary approach is the expectation of a planetary government in the foreseeable future. We are a very very long way short of planetary government. Even within the European Community when one considers the problems that have yet to be resolved in developing a common currency, with all of the implications for federation which a common currency implies, one must be cautious about assuming that the world will move rapidly to global government. Moreover, large-scale migration from country to country or region to region seems to me no longer a major solution to the imbalances. I don't foresee in the next century or two anything like a total equalization of world standards of living. But in the richest countries there is now a growing tendency to question the advantages of growth as such. Growth is now considered more instrumental than an objective. Growth for what? Growth for more satisfactory living? Growth for quality of life? This may mean more leisure rather than work. If at the same time effective interdependence can be maintained between rich and poor, I would expect some narrowing of the famous gap between the two. That goal, it seems to me, is what serious efforts should be focused on. I don't expect the United Nations to be converted into a global government within my grandchildren's lifetime, to say nothing of my own. But I do think we should cultivate functional international institutions which will take area by area, try to identify specific problems and possibilities of convergence of interests, and then work seriously to make those convergences a reality.


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