Sustainable Development? How About Sustainable Growth?

Sustainable Development? How About Sustainable Growth?

Smith Op-Ed in The Wall Street Journal Europe
May 31, 2001

The economic news out of Europe is bad -- again. The euro is trending lower. German business confidence is down. Once-optimistic growth forecasts are being downgraded for the year.

Yet amid these worrisome indicators of economic non-development, European leaders are talking about making it "sustainable." At the Gothenburg summit next month, Commission President Romano Prodi will unveil a 16-page strategy paper titled "A Sustainable Europe for a Better World." Among its other planks, the plan calls on Europe to meet Kyoto Protocol targets for greenhouse-gas emissions, impose an EU-wide minimum gasoline tax and set stringent new regulations on the production and use of chemicals. "If we are to deliver a better quality of life for ourselves, our children and our grandchildren," blazed Mr. Prodi in a recent speech, "we need to make sustainable development happen and become relevant and exciting to `ordinary' Europeans."

Good luck. Sustainable development -- as formally stated, "development that meets the needs of the present without compromising the ability of future generations to meet their own needs" -- has become a fashionable catchphrase since it was first introduced at the Rio Global Summit in 1992. Coupled with its dynamic policy partner, the so-called "precautionary principle," sustainable development is premised on the conviction that modern man is now in the process of consuming the world's finite resources in an unsustainable way. There are, it is alleged, too many people burning too much oil, wasting too much water, using too much toilet paper and eating too much beef. Making matters worse is modern technology, which accelerates the extraction of resources, and global markets, which distribute these resources ever more widely and whet appetites for more. As a result, so this tale of woe goes, mankind is facing environmental catastrophe, which can be averted only through a profound change in public policies and private lifestyles. "We all need to change our attitudes, our behavior," stresses Mr. Prodi.

This has a familiar ring, as if the sundry cliches and false prognostications of the 1970s had been reissued for publication in an updated edition. In fact, the intellectual pedigree for sustainable development goes back further, to Thomas Malthus, the godfather of "scientific" doomsaying. As everybody knows, Malthus's prediction that population growth would outstrip agricultural production and thus lead to mass starvation proved famously wrong. Why? Because human ingenuity defeated productivity expectations, first through mechanical aids, then through the use of chemicals, then with the Green Revolution, and now by reduced-error hybridization techniques, which enhance productivity as well as the nutritional value of staple crops.

Yet despite this most glaring of examples, advocates of sustainable development continue to see the world in essentially static terms, while votaries of the precautionary principle refuse to countenance the adoption of new technologies on grounds that, inevitably, they pose certain risks.

Although the two concepts are obviously distinct, they share common premises and entail similar policy prescriptions. Science must be put "in the service of mankind," which in practice means dictated by the phobias and fashions of NGOs like Greenpeace. Policy must be centrally coordinated, preferably at the highest level possible, since "global" problems demand "global solutions." Punitive measures against consumption -- especially gas taxes -- are de rigueur, never mind their massive unpopularity and well-known ineffectiveness. In trade negotiations, environmental and labor "standards" take precedence over all else, even if that cripples the negotiations themselves, as happened in Seattle in 1999. Corporations must also take "sustainability" concerns on board: The Prodi Plan envisions a "triple bottom line in their annual reports to stakeholders, expressing their performance against economic, environmental and social yardsticks."

All this, of course, is a recipe not for any genuine kind of sustainable development , but for economic stagnation, or as former Mexican President Ernesto Zedillo put it at Davos last year, "saving the developing world from development." And economic stagnation is the single greatest source of environmental problems: from the rust-belt industries of northern France to the smog caused by cheap fuel mixtures in southeast Europe to the rural desertification caused by backward farming techniques (subsidized through the Common Agricultural Policy) in Spain.

Put another way, if Europe wants to improve the environment, it needs more economic growth, and thus more economic freedom and more technological development, not less. True, markets are always imperfect; things are always left out. But the solution is to expand the institutions of freedom -- to expand the system of creative private stewardship rather than seek to tack on to the marketplace an ever more complex system of regulatory corrections. Here another example from history comes to mind. Until the 1850s, much of the world was lit by whale oil, used in the production of candles. This indeed was a finite resource being exploited by the Captain Ahab's of the world at a "nonsustainable" rate. But the solution was not to hunt whales "sustainably"; the rising price of whale oil due to its increasing scarcity prompted the world to search for, and find, a more sustainable source of lighting. That led first to coal oil, then kerosene and finally electricity. Similarly, the invention of coke made it possible to save America's woodlands from the devastation suffered in England, while later agricultural and transportation gains allowed vast areas of America to revert to woodlands. Note, incidentally, that this entailed a shift from renewable energy resources (trees) to nonrenewable ones (coal).

At bottom, the problem with the mindset behind sustainable development is that it views mankind as a stomach, rather than as hands and a brain. But all human experience teaches us that man is not a devouring creature, he is a creating and inventing and risk-taking one. Currently, the modern Malthusian movement is led by rent-seeking business groups fearful of global competition, environmentalists fearful of everything, and politicians seeking stasis over change. " Sustainable Development " and the "precautionary principle." may sound like an unobjectionable aspiration. But too often they effectively mean, "don't use it today, and don't develop it for tomorrow." With the economy again in the doldrums, another brake on growth is hardly what Europe needs.