Saturday, July 9, 2011

Resources: The Change in Consensus

One item that is often alluded to is a future (or present) fight for resources by various countries in the future.  In the West our governments are certainly involved in resource issues – our largest post-Vietnam combat deployments have been to the Middle East after all.  But we also use a defuse mix of corporations and financial entities to make the system (ostensibly) work.

It is not that surprising that the countries that came to the modern capitalist system might feel that a change in the rules are in order.  What I find interesting about the, below quoted, interview in the Asia Times is that there is a very direct discussion of resource limitations. The quotes are not necessarily in sequence.

Benjamin A Shobert, Asia Times, 7 July 2011

Benjamin A Shobert (BAS): Some people may read your book as a neo-Malthusian argument. You write on page 48 that "Malthus was not wrong when he said that if things continued as they were, limits would be reached ... if these longer-term depletion issues, such as where the water will be found to raise crops for the next generation, [are not addressed] Malthusian concerns have only been deferred, not solved." How do you distinguish your arguments from those Malthus made, especially in light of the belief many have that technology will ultimately provide the necessary answers?

Chandran Nair (CN): It is important to note that Malthus was not wrong, he only got the timing wrong. There has been work done to show this but it rarely gets any air time. After all talking about restraining consumption puts one in the pariah bin by the deniers and thus out-dated and cliched arguments are used to dismiss the facts - despite the science.

What is important is to understand is that Malthus lived in a very different world - the 17th century. So those who suggest that this is all a Malthusian rehash need instead to be challenged. In the 21st century we have much better information and tools to analyze the impact of our current trajectory of consumption-led economic growth on the planet and on our societies. It is those who are in denial and who believe there are no limits who should be the odd ones out, not those who are willing to use the scientific facts to argue for restraint in the way we use resources in a constrained planet.

As to his feeling about changing the current system:

BAS: Readers of your book will encounter three key themes: first, the limitations of Western capitalism in general, second a more specific critique of the inability for market-based solutions to address network externalities (costs covered by society but not born by corporations), and the sustainability of demographic and consumption trends in emerging economies. With these in mind, would you expand on what you see as the limitations to Western capitalism?
CN: As I point out in the book, Western capitalism has served the West and parts of the world very well over the last 60 to 70 years. But, it has exhausted itself now.

Extreme capitalism, as I define it, is rooted in the belief that countries and corporations have the right to externalize the true cost of economic activity; how the resource base fulfills the aspirations of consumers has not been fully priced into the market. My analysis is not a rant against capitalism - it is an attempt to advocate for the true pricing of resources and therefore for its more equitable use.

I believe capitalism in general needs to make three major adjustments: first we need to accept resource limitations and constraints, second resources need to be re-priced to reflect their true total cost, and third, shared resources need to be at the center of policy making, not at the periphery as they currently are. The economy needs to be subservient to maintaining the vitality of the resource base, and not the other way round.

BAS: As you mentioned earlier, your book is an advocate for a strong state. That is a very unpopular political idea in the West at the moment. How is this part of the book being received by those in the West?

CN: The book has received a very strong response in Europe. I was recently speaking to a large European company in the global automotive industry and made the point that we really do not need another couple of billion cars in Asia which is the likely scenario if Asia adopts Western car ownership levels.

This is hard for companies to hear, and even harder for them to incorporate into what they call their sustainability practices. But there is no denying the truth and I rarely find anyone arguing against these facts and the implications. The smart companies and non-deniers know and are willing to have that debate. Sadly many simply do not want to go there. Needless to say there are always the "technology will solve all the problems" group but they too, when pushed, back off.

Sustainability is ultimately about doing less and companies inherently fight this as they do not "do less"; they fight regulations, which means that only government can be the one to stand up and say "this isn't good and therefore here is the framework you can operate within". So, for a company in the automobile business, a globally sustainable strategy isn't one that seeks to minimize the number of cars on the road; they are going to find a way to sell more cars but use the usual buzz words around green and zero emissions to respond to the hard questions.

That means that society has two choices: either governments can act through tough intervention to prevent the resource drain of another billion cars hitting the road, or remain hostage to the narrow interests of some companies and thereby in effect not do what is their responsibility to prevent the catastrophic impacts that will arise from such a scenario. I believe a strong government can - and should - stand up and prevent the inevitable collapse of shared resources. In Europe, there is great interest in this idea but wariness about strong governments.

In the US, what has been very interesting has been the great discomfort displayed by those who won't accept even the most basic idea in the book, that there are limits. This is not to say all Americans think this way, but in the business and financial world, denial is rampant.

Some influential people have read the book and are trying to get the book's ideas listened to in some policy making circles; but there is a strong ideological bias against any ideas for a strong government intervening in the individuals' right to consume. Consequently, I find myself writing for and speaking primarily to those in Asia, because the West if it is unable to come to terms with this dilemma, is going to ultimately have to adapt to the changes that those in Asia need to make for their own reasons.

I want Asian leaders to accept that they have been intellectually subservient for too long. Many Asians, given the colonial past, inherited the belief that the Western model is somehow better and this attitude sadly pervades much of Asia's policy, business and political circles.
Both the Indians and the Chinese have made massive efforts to build up their blue water navies.  It may be recalled that when the British went to fight in the Argentina over the Falklands Islands, that they had sold their little aircraft carriers to India, but had not made delivery yet.  Delivery was delayed.

Right now we dominate above and below the seas.  Someday in the future, a small cheap diesel-electric submarine, or remote piloted vehicle is going to knockout (not necessarily sink) one of our huge aircraft carriers.  At that point you will have an “End of the World As We Know It” (EOTWAWKI) event: and likely most of us won’t even know it.

Chandran Nair’s book can be found here: for an interesting review.

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