On Growth Two

22. Yochi Kaya

Professor Yochi Kaya was born May 18, 1934, in Sapporo, Japan. He was graduated in economics at the University of Tokyo in 1957. At present he lectures on systems controls at the same university and participates in the work of the Japanese team of the Club of Rome.

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Among his books published in English are Control Engineering and Adaptive Control Procedures.

How many Club of Rome teams are working in Japan?

Only one. We have one team with four different projects.

What do the four projects mainly consist of?

Our four projects are principally concerned with the future of the planet and its relation to Japan. The first project is concerned with problems of resources, energy resources, such as iron, copper, and aluminum. As you know, there have been many kinds of projects related to these problems. However, most of them were concerned with specific items, for example, energy problems by themselves, or iron shortages or aluminum shortages separately. We are undertaking a vast research project on all energy problems simultaneously. We study them as a unit, as a system. We started this project in 1972, and several specialists are working on it alone. Among other things, we compile a review of all known research concerning the mineral and energy resources. When this is completed, we will make a model showing the relationships among prices, the supply and demand. The researchers concentrate on what will be the future supply of mineral and energy resources. They undertook one other important project: determination of the climatic effects of heat and carbon dioxides. As you know, researchers in Japan have been studying these problems by the use of simulation methods. This is, of course, a problem concerning geology and meteorology. For example, a simulation model was made which could present the behavior of the average earth temperature in relation to the carbon dioxide content and the heat expelled in the air. These models are still incomplete and we are at present improving them. We discovered some faults in the model developed in the past and then made an entirely new simulation model for this kind of problem.

Our second project is related to the international division of labor. I think we are dealing here with a very important problem. This project might be called a kind of world-model project. We constructed a world model quite different from the Meadows model in the initial Limits to Growth study. We divided the planet into nine regions, each of which has six sectors: agriculture, mining, light industry, heavy industry, manufacturing, and services.

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General services.

Yes. We did not construct a simulation model, but a kind of planning model. In other words, we set a target for the future world. This target was expressed mathematically in a criterion function. By utilizing the mathematical programming method such as quadratic programming and others, we were able to minimize the criterion function. The objective of this project is the following: We have global constraints concerning resources and environment. Of course, these problems are related to population questions and economic development. Nevertheless, what is more important for us at the moment is how to establish industries in the developing countries. Because, as you are aware, they will be unable to develop their full economic activity without outside help, as from Japan. In this case, we encountered difficult problems. Almost all developed countries are industrialized countries. Their main exports consist of industrial products. Therefore, if developing countries would want to export their industrial goods, they could not do so to both developing and developed nations.

Except for Japan, because you don't have relatively cheap labor.

In the past this was true. But now the situation has very much changed. Moreover, in the future we will meet many, many problems of global constraints. For example, energy supplies are hardly adequate anymore and will be scarce in the 1980's or 1990's. The price of energy resources will rise considerably. Maybe even four times or more. This price rise may have a deep and negative impact on the development of developing countries. What we will have to do is to find a way, now, to establish industries in developing countries, even if these kinds of constraints will prevail. I think that a most important method is to depress industry in industrialized countries.

What do you mean by depress: reduce?

I would like to explain the situation in greater detail. What we have to do is find a way to narrow the gap existing between the developed and developing countries. Perhaps the most important aspect of this question is to be able to change the industrial patterns in the developed nations.

That seems to be the big question: How to do this in what Kenneth Boulding once called ‘the cowboy economy of the United States’; to make it a ‘spaceship-earth economy.’

It should, anyway, result in the leveling up of industry in the developing lands. I will give a hint of what's perhaps a workable solution. Compare the

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total arable land of the United States with, for example, that of Asia. Used arable land per person in Asia is about 0.34 hectares, while that of the United States is about 2.1. This is almost six times that of Asia. Almost all arable land in Asia is already cultivated. In Asia, the ratio of all cultivated land to total arable land, is about 0.8 or about eighty percent, and therefore very high. In the United States only fifty percent, or about one hectare per person, is still unused. Moreover, the productivity in the United States per hectare is much higher than in Asia. The GNP per capita in the United States is the highest in the world. If the Americans could export only for the development of other countries and if they would export more agricultural goods to other parts of the world, this could bring a solution. In that case, they would have to reduce their GNP. Of course, we have to discuss many aspects of the problem. If we want to develop heavy industry in Asia, we encounter a series of difficulties. Income level and tradition are two such problems. Income is low, which keeps educational levels low. This means that even if there is room for the development of heavy industry, it is almost impossible -

- to train people.

Exactly. In this respect we will have to give developing nations more time.

Abdelkader Chanderli, president of the National Algerian Gas Company, complained in my interview with him that some of the industrial nations monopolize technological know-how, to the disadvantage of the developing nations.

Transfer of technology or knowledge from the developed to the developing nations is perhaps one of key problems linked to the economic development of the developing nations. We have to take the procedure of the development, timewise, of the developing nations very much into account. These problems are immense. Our team is attacking them, basically, by using the method of mathematical programming.

The third project we have undertaken is to seek the possible and desirable behavior of the Japanese economy, subject to various international situations such as constraints of oil and/or other mineral resources. The methodology is again utilization of the quadratic programming method, and the results show that the fragility of the Japan economy is mainly because of the high import ratio of energy.

The fourth project is the study of the Japanese value system. The researchers in the project are constructing a model or models representing

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the relation of the Japanese industrial structure to the value system of the Japanese people.

Are you using for this model behavioral scientists, social scientists, psychologists?

Yes. Two of our members of the team are systems scientists. Two are social scientists, including an economist. We don't have social psychologists, at least, not yet.

But would you not agree that psychologists hold the key to these problems?

I agree. But we couldn't find a suitable candidate for the job.

What is the difference of your team's approach from that of Forrester and Meadows?

We do quite different work. For instance, take the second project. The main objective in itself is quite different. Meadows intended to show, with his team, what might be the result of global constraints. They thought that the world might meet with various crises during the coming century and they tried to show what might be the results. What we in Japan are trying to show is what kind of industrial pattern, worldwide or in Japan, might be the best, taking into account these coming global constraints as well as the redistribution of income. Also, it should be kept in mind that the results of this study differ entirely in various corners of the world. The basic difference from the Meadows team is the objective. We feel that the most important goal is to discover how to distribute our material resources so that developing countries may develop more. This is one point. The second point is that our model is neither a simulation nor a second prediction model, but a planning model. We establish an objective and try to find the solution that optimizes the criterion functions. What we are primarily looking for is not to try to see what will be, but to see what has to be done to change the future.

To influence it?

That's right. Our attitude toward these global problems is quite different and the methodology itself is also quite different from the ForresterMeadows approach.

Why is the basic approach of the Japanese Club of Rome team so different from what was done at MIT?

I remember a talk given about three years ago at MIT. I was there to attend

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the congress arranged by the Club of Rome in which we discussed what kind of project we should undertake. At that time Professor Jay W. Forrester showed us the prototype world-model. At that time I already considered it too global. There were, for instance, no regional perimeters. Of course, there are global constraints concerned with resources, environment, and land. All these are quite serious, that is true. But I feel that even more serious and important is the problem of the distribution of material affluence. In India, for instance, the GNP per capita is under one hundred US dollars, which represents about one or two percent of the per capita income in the United States.

What you mean is, How does one design models that take in these differences?

Correct. The people of India are not restricted by global constraints, but by regional constraints, by the smallness of the land allotted to the individual farmer and so forth. Global constraints are no doubt quite serious, but we have to look at their effects on the regional way of life and the regional economic development. I relayed these views to professors Forrester and Meadows and recommended to them that they divide the model at least into two parts, into developed and underdeveloped nations. But, unfortunately, they did not follow this course. This, in my view, is a very basic point. The other point that I would like to make is that what we are doing here in Japan is not to say, ‘Well, the world is heading for doom,’ or be guided by negative thinking, but to say what we can do.

In practical terms.

That is right. I am an engineer, so my way of life is not to become alarmed, but to be active and constructive. This, then, is the basic reason why we undertook the Club of Rome projects.