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The Miasma Of Growth

By R Siddharth

08 April, 2006
Countercurrents.org

"Have you considered how the ancient Greeks exploded all over Europe circa 450 BC?" asked J. Krishnamurti, the philosopher, in an address before a cultured audience at Madras. So as not to embarrass them he also provided the answer. "Greece was responsible for measurement. Without measurement there can be no technology. And the Western world is capable of great technology, which has moved to East Asia."

"The ancient Indians said that measurement is illusion. India exploded all over Asia. Don't be proud of it, it is all gone."

Growth has made its way back into the lexicon of economics and business. The Indian Business leader can now be seen at international gatherings, all puffed up by statistical indices that show that we have achieved economic growth of 8% or thereabouts over the last 3 years. Rates of growth such as these have been unheard of in the West for the past several years and remain only within the realm of pious hopes for the future. The Indian governmental leaders even coined a word for this phenomenon: they called it India Shining, only to find the truth in the old saw that all that glitters is not gold.

Never mind that even our 8% growth has been beaten by China's growth which has been of the order of 10% for a much longer period. So we all bow to the Chinese even as whispers abound about the suspiciousness of China's statistics. But there is no getting around the fact that 2 out of 3 items on American supermarket shelves or department store hangers bear the tell-tale sign "Made in China". Or the fact that a majority of worldwide freight shipments either originates in China or has its destination somewhere in that country.Growth has a tremendous hunger for energy, which can even lead to wars between two countries that both want it.

I read a report in the Guardian that of Brazil's rain forests, an area the size of Israel (about 10,000 square miles) is being converted annually to growing soya beans for export to China. According to the experience of the developed world as incomes rise, diet tends to become more protein and meat intensive.

It requires 7 kilograms of grain to produce a kilogram of meat which may explain the scale of conversion of Brazilian rain forests into soy farms.

Who are the beneficiaries of this new found prosperity? The urban citizens in the metropolitan areas around Shanghai, Hong Kong, and of course, Beijing . Even counting all the tailings this can amount to about 400 million people. Nearly twice this number are still living out their lives in traditional rural misery. And for most of them growth holds no promise of a better lot.

What of Shining India, meanwhile?

A previous Prime Minister made a short trip to Moscow, Washington DC and London. He put out to Putin in the matter of the purchase of a yet to be commissioned aircraft carrier, then kowtowed to Bush on putting out (I believe the word in vogue is BPO) and rounded off the week with a similar deal with Blair. Then he hastily made his way to an NRI hospital in India for knee replacement surgery - the need for which was probably brought about by a whole week of genuflecting before Putin and Bush and Blair.

Well, India too has joined the growth bandwagon. With one difference: there were always have people talking about dividing the pie differently much before there is a hint of growth in the air. An official document showing growth at rates over twice as much as the historic Hindu rates of growth will generate as much excitement as three good monsoons in a row. But the evidence of the failure of a growth oriented set of policies is likely to be swamped by the hosannas trumpeted by those in charge of affairs of the state.

For growth on such a large scale can be achieved only if one or both of the two conditions noted below hold:

control of nature's capital in the hands of a few, and its use as an input to produce goods of mass consumption.

having no or inadequate institutional mechanisms for dealing with spillover or third party costs, to make sure that the ones responsible for such costs bear them.

At the level of the enterprise, it seems possible to account for these two elements of costs (at least in theory) by appropriate regulatory and environmental policies,. However in a market driven economy the incentives for management are quite the opposite. For a CEO who is rewarded by the last quarter's results is faced with no demand for policies based on wisdom over the long run. We would be very surprised if he didn't develop a severe case of managerial myopia by focusing on growth. But we have to grant that growth can cover a multitude of sins.

Should we step up a level and choose a governmental solution, we will find ourselves in the same sort of pickle as before. For the minister and the bureaucrat will face the same sort of paradox as the corporate manager. The solutions they propose will at best be a version of crony capitalism.

So it looks like we have to move one level higher, to have a multinational organization which will have representation from the whole spectrum of countries. Rather like the WTO. And just as effective.

Is there no way out? There is, but the road is long and tortuous. We must be prepared to look critically at things that we have taken for granted as being part of our lifestyle. Among these will be the fetish about growth and the miasmas associated with it. The success of the Indian pharmaceutical industry cannot be disconnected from the extra-ordinary level of pollution - of the industrial area at Patancheru - at similar industrial estates are proof enough of the failure of growth oriented policies.

And what of energy consumption which will have to be provided for to achieve growth? Even countries which have passed the stage of development of India or even China and have a significant 'green' element in their political pantheon would be daunted by the scale of environmental degradation that is inevitable in our plans to grow. But of one thing we can be sure: while the growth we achieve may have a miasma all of its own, it will be dominated by money. The apparatus for the measurement of output and the apparatchiks to compute growth will be the same as before: mere illusions all.

R. Siddharth lives in Bangalore. He can be reached at [email protected]

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