[Paleopsych] LRB: (Jared Diamond) Partha Dasgupta: Bottlenecks

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Partha Dasgupta: Bottlenecks
http://www.lrb.co.uk/v27/n10/print/dasg01_.html
London Review of Books Vol. 27 No. 10 dated 19 May 2005

    Collapse: How Societies Choose to Fail or Survive by Jared Diamond
    Allen Lane, 575 pp, £20.00

    Are our dealings with nature sustainable? Can we expect world economic
    growth to continue for the foreseeable future? Should we be confident
    that our knowledge and skills will increase in ways that will lessen
    our reliance on nature despite our growing numbers and rising economic
    activity?

    These questions have been debated for decades. If the debate has
    become increasingly shrill, it is because two opposing ways of looking
    at the world continue to shape it. If, on the one hand, we look at
    specific examples of natural assets (fresh water, ocean fisheries, the
    atmosphere as a carbon `sink': ecosystems generally), there is
    convincing evidence that at the rate at which we currently exploit
    them, they are very likely to change character for the worse, with
    very little warning. On the other hand, if we study historical trends
    in the price of marketed resources, or improvements in life
    expectancy, or recorded growth in incomes in regions that are
    currently rich or on the way to becoming so, the scarcity of resources
    would appear not yet to have bitten us. If you were to point out that
    there are acute scarcities in the troubled nations of sub-Saharan
    Africa, those whose perspective is ecological will tell you that
    people living in the world's poorest regions are poor because they
    face acute scarcities relative to their numbers; while those whose
    perspective is economic will argue that people experience scarcities
    precisely because they are poor.

    You may think that a study of past societies could throw some light on
    the question. Most people have heard about the marked decline in the
    population of Easter Island some three centuries ago; they may know,
    too, of the pueblos abandoned by the Anasazi in the south-west United
    States eight hundred years ago, and of the disappearance of the Maya
    of the southern Yucatán a thousand years ago. They are dimly aware
    that these events had something to do with mismanagement of the local
    environment, reinforced in some cases by prolonged droughts. But the
    same people also know that the civilisations of China and India have
    evolved for about 5000 years and 3500 years respectively, and that
    neither is about to say goodbye. So what were the differences between
    the civilisations that disappeared and those that adapted more or less
    successfully to changing circumstances over the millennia? To say that
    the societies that have survived have done so because they managed
    their habitats well, maintained profitable relationships with their
    neighbours and prevented their members from killing one another, isn't
    really to say anything: the survival of those societies itself proves
    all that. We have to know what the successful ones did in order to
    avoid the mistakes of those that went under. We would then want to
    know what those societies that have enjoyed material progress in
    recent centuries did that was not only not wrong, but may even have
    been right.

    Jared Diamond, a professor of geography in California, looks for
    answers to these big questions by examining the societies that
    collapsed. The body of his book contains accounts of four such
    societies: the Easter Islanders; the Anasazi; the Mayans; and the
    Norse in Greenland, who died out six hundred years ago. Diamond
    demonstrates that the proximate cause of each collapse was ecological
    devastation brought about, broadly speaking, by one or more of the
    following: deforestation and habitat destruction; soil degradation
    (erosion, salinisation and fertility decline); water management
    problems; over-hunting; over-fishing; population growth; increased per
    capita impact on the environment; and the impact of exotic species on
    native species of plants and animals. As might be expected, the
    relative importance of these factors differs from case to case.

    Diamond's case studies have a thoroughness appropriate to the moral
    seriousness of his inquiry. He traces the way, step by tragic step,
    each of those long-dead societies, as their circumstances changed,
    made choices that led to their demise. In a moving account of the
    Norse in Greenland, for example, he shows that there was seemingly
    nothing wrong with their society. They had brought with them a devout
    and orderly set of practices relating them to God, to one another and
    to nature as they had known it in southern Norway. As Diamond
    discovers, the immigrants possessed an enormous amount of what today
    is known as `social capital'. And in that lay the source of their
    eventual collapse; for in their determination to maintain cultural
    coherence in a foreign environment, they made no attempt to learn from
    the native inhabitants - the Inuit - about the local ecology and the
    reasons the latter relied on fish and seals for sustenance. The
    immigrants' culture had been built instead on cattle, crops and wooden
    houses. And in choosing to pursue their previous way of life in a
    fragile, alien landscape, they effectively signed their own death
    warrant. The Norse in fact died of starvation. This is history as
    geography, and it is deep and heady stuff.

    In his search for the root cause of each collapse, Diamond deems no
    item of information innocuous, no evidence too awkward for
    consideration. He treats his raw materials like pieces in a jigsaw
    puzzle - written records, archaeological remains, oral history,
    palaeontological imprints - and places them against the broad canvas
    of those societies' geography. He sifts through them to reach the most
    plausible reconstruction of what happened in the distant past. It is
    detective work of great skill and integrity. Some might wonder whether
    we need two hundred pages of analysis to reach an understanding of
    these collapses, but I find Diamond's obsession with detail wholly
    understandable. When you embark on a project of such scope as this,
    the urge to dig and then poke around some more to check what else
    there might be is irresistible.

    Diamond's reading of the collapses is original, for nature doesn't
    figure prominently in contemporary intellectual sensibilities.
    Economists, for example, have moved steadily away from seeing location
    as a determinant of human experience. Indeed, economic progress is
    seen as a release from location's grip on our lives. Economists stress
    that investment and growth in knowledge have reduced transport costs
    over the centuries. They observe, too, the role of industrialisation
    in ironing out the effects on societies of geographical difference,
    such as differences in climate, soil quality, distance from navigable
    water and, concomitantly, local ecosystems. Modern theories of
    economic development dismiss geography as a negligible factor in
    progress. The term `globalisation' is itself a sign that location per
    se doesn't matter; which may be why contemporary societies are
    obsessed with cultural survival and are on the whole dismissive of our
    need to discover how to survive ecologically.

    Diamond believes that the risk of collapses such as those experienced
    by earlier societies should be a matter for increasing concern today.
    To demonstrate why, he describes how Rwanda's collapse as a society
    was brought about by unprecedented population growth in a subsistence
    economy operating in a fragile ecosystem. He also offers a natural
    history of China and Australia and the impact their populations are
    now having on their ecosystems. By his reckoning, the situation today
    is worse than it has ever been: as well as the old dangers of
    deforestation and so forth, we now have to deal with anthropogenic
    climate change, the accumulation of toxic chemicals, energy shortages
    and a near-full use of the Earth's photosynthetic capacity. The
    concluding chapters of the book are devoted to speculations on the
    contemporary human condition, responses to dismissals of the concerns
    of environmentalists by sceptics, and a meditation on our hopes and
    the perils we face. Which is when the book skids and becomes a mess.

    Diamond thinks that in order to demonstrate that mankind is currently
    engaged in unsustainable economic activity, it's enough to offer a
    sample of the insults modern economies have been inflicting on nature.
    Thus he reports a case of deforestation here, increased pesticide
    run-off there, loss of biota somewhere else and carbon emissions
    everywhere. But we have been travelling that route for nearly five
    decades now: environmentalists have routinely pointed to the damage
    modern economic activity inflicts. Moreover, in recent years such
    environmental scientists as Paul Ehrlich, Edward Wilson and, most
    recently, Gretchen Daily, Harold Mooney and Walter Reid, have spoken
    out while taking far greater care with details and qualifications than
    Diamond appears to believe is necessary.

    The more important reason why Diamond's rhetoric doesn't play well any
    longer is that it presents only one side of the balance-sheet: it
    ignores the human benefits that accompany environmental damage. You
    build a road, but that destroys part of the local ecosystem; there is
    both a cost and a benefit and you have to weigh them up. Diamond shows
    no sign of wanting to look at both sides of the ledger, and his
    responses to environmental sceptics take the form of `Yes, but . . .'
    If someone were to point out that chemical fertilisers have increased
    food production dozens of times over, he would reply: `Yes, but they
    are a drain on fresh water, and what about all that phosphorus
    run-off?' Diamond is like a swimmer who competes in a race using only
    one arm. `In caring for the health of our surroundings, just as of our
    bodies,' he writes at one point, `it is cheaper and preferable to
    avoid getting sick than to try to cure illnesses after they have
    developed' - which sounds wise, but is simply misleading bombast.
    Technology brings out the worst in him. At one point he claims that
    `all of our current problems are unintended negative consequences of
    our existing technology,' to which I felt like shouting in
    exasperation that perhaps at some times, in some places, a few of the
    unintended consequences of our existing technology have been
    beneficial. Reading Diamond you would think our ancestors should all
    have remained hunter-gatherers in Africa, co-evolving with the native
    flora and fauna, and roaming the wilds in search of wild berries and
    the occasional piece of meat.

    Here I should put my cards on the table. I am an economist who shares
    Diamond's worries, but I think he has failed to grasp both the way in
    which information about particular states of affairs gets transmitted
    (however imperfectly) in modern decentralised economies - via economic
    signals such as prices, demand, product quality and migration - and
    the way increases in the scarcity of resources can itself act to spur
    innovations that ease those scarcities. Without a sympathetic
    understanding of economic mechanisms, it isn't possible to offer
    advice on the interactions between nature and the human species.

    Here is an example of what I mean. Forests loom large in Diamond's
    case studies. As deforestation was the proximate cause of the Easter
    Islanders' demise, he offers an extended, contrasting account of the
    way a deforested Japan succeeded, in the early 18th century, in
    averting total disaster by regenerating its forests. Now consider
    another island: England. Deforestation here began under the Romans,
    and by Elizabethan times the price of timber had begun to rise
    ominously. In the mid-18th century what people saw across the
    landscape in England wasn't trees, but stone rows separating
    agricultural fields. The noted economic historian Brinley Thomas
    argued that it was because timber had become so scarce that a lengthy
    search began among inventors and tinkerers for an effective coal-based
    energy source. By Thomas's reckoning, the defining moment of the
    Industrial Revolution should be located in 1784, when Henry Cort's
    process for manufacturing iron was first successfully deployed. His
    analysis would suggest that England became the centre of the
    Industrial Revolution not because it had abundant energy but because
    it was running out of energy. France, in contrast, didn't need to find
    a substitute energy source: it was covered in forests and therefore
    lost out. I'm not able to judge the plausibility of Thomas's thesis -
    there would appear to be almost as many views about the origins,
    timing and location of the Industrial Revolution (granting there was
    one) as there are economic historians - but the point remains that
    scarcities lead individuals and societies to search for ways out,
    which often means discovering alternatives. Diamond is dismissive of
    the possibility of our finding such alternatives in the future
    because, as he would have it, we are about to come up against natural
    bottlenecks. We should be persuaded by the evidence that has been
    gathered over the years by environmental scientists that he is right,
    but simply telling us that we are about to hit bottlenecks won't do,
    because environmental sceptics would reply that discovering
    alternatives is the way to avoid them.

    If the future is translucent at best, what about studying the recent
    past to see how the human species has been doing? The question then
    arises: how should we recognise the trade-offs between a society's
    present and future needs for goods and services? To put it another
    way, how should we conceptualise sustainable development? The
    Brundtland Commission Report of 1987 defined it as `development that
    meets the needs of the present without compromising the ability of
    future generations to meet their own needs'. In other words,
    sustainable development requires that each generation bequeath to its
    successor at least as large a productive base as it inherited. But how
    is a generation to judge whether it is leaving behind an adequate
    productive base for its successor?

    An economy's productive base consists of its capital assets and its
    institutions. Ecological economists have recently shown that the
    correct measure of that base is wealth. They have shown, too, that in
    estimating wealth, not only is the value of manufactured assets to be
    included (buildings, machinery, roads), but also `human' capital
    (knowledge, skills health), natural capital (ecosystems, minerals,
    fossil fuels), and institutions (government, civil society, the rule
    of law). So development is sustainable as long as an economy's wealth
    relative to its population is maintained over time. Adjusting for
    changes in population size, economic development should be viewed as
    growth in wealth, not growth in GNP.

    There is a big difference between the two. It is possible to enumerate
    many circumstances in which a nation's GNP (per capita) increases over
    a period of time even as its wealth (per capita) declines. In broad
    terms, those circumstances involve growing markets in certain classes
    of goods and services (natural-resource intensive products),
    concomitantly with an absence of markets and collective policies for
    natural capital (ecosystem services). As global environmental problems
    frequently percolate down to create additional stresses on the local
    resource bases of the world's poorest people, GNP growth in rich
    countries can inflict a downward pressure on the wealth of the poor.

    A state of affairs in which GNP increases while wealth declines can't
    last for ever. An economy that eats into its productive base in order
    to raise current production cannot do so indefinitely. Eventually,
    GNP, too, would have to decline, unless policies were to change so
    that wealth began to accumulate. That's why it can be hopelessly
    misleading to use GNP per head as an index of human well-being.
    Recently the World Bank published estimates of the depreciation of a
    number of natural resources at the national level. If you were to use
    those data (and deploy some low cunning) to estimate changes in wealth
    per capita, you would discover that even though GNP per capita has
    increased in the Indian subcontinent over the past three decades,
    wealth per capita has declined somewhat. The decline has occurred
    because, relative to population growth, investment in manufactured
    capital, knowledge and skills, and improvements in institutions, have
    not compensated for the decline of natural capital. You would find
    that in sub-Saharan Africa both GNP per capita and wealth per capita
    have declined. You would also confirm that in the world's poorest
    regions (Africa and the Indian subcontinent), those that have
    experienced higher population growth have also decumulated wealth per
    capita at a faster rate. And, finally, you would learn that the
    economies of China and the OECD countries, in contrast, have grown
    both in terms of GNP per capita and wealth per capita. These regions
    have more than substituted for the decline in natural capital by
    accumulating other types of capital assets and improving institutions.
    It seems that during the past three decades the rich world has enjoyed
    sustainable development, while development in the poor world (barring
    China) has been unsustainable.

    These are early days in the quantitative study of sustainable
    development. Even so, one can argue that estimates of wealth movements
    in recent history are biased. As regards natural capital, the World
    Bank has so far limited itself to taking into account the atmosphere
    as a `sink' for carbon dioxide; minerals, oil and natural gas; and
    forests as a source of timber. Among the many types of natural capital
    whose depreciation has not been included are fresh water; soil;
    forests, wetlands, mangroves and coral reefs as providers of ecosystem
    services; and the atmosphere as a sink for such forms of pollution as
    particulates and nitrogen and sulphur oxides. If these missing items
    were to be included, the poor world's economic performance over the
    past three decades, including China's, would undoubtedly look a lot
    worse. The same would be true for the rich world.

    There are further reasons for thinking that the estimates of wealth
    changes that I have been referring to are biased. They have to do with
    the way prices are estimated for valuing natural capital. Empirical
    studies by earth scientists have revealed that the capacity of natural
    systems to absorb disturbances is not unlimited. When their absorptive
    capacities reach their limit, natural systems are liable to collapse
    into unproductive states. Their recovery is costly, both in time and
    material resources. If the Gulf Stream were to shift direction or slow
    down on account of global warming, the change would to all intents and
    purposes be irreversible. We know that up to some unknown set of
    limits, knowledge, skills, institutions and manufactured capital can
    substitute for nature's resources; meaning that even if an economy
    decumulated some of its natural capital, in quantity or quality, its
    wealth would increase if it invested sufficiently in other assets. The
    remarkable increase in agricultural productivity over the past two
    centuries is a case in point. But there are limits to
    substitutability: the costs of substitution have been known to
    increase in previously unknown ways as key resources are degraded.
    Global warming is a case in point. When the downside risks associated
    with such limits and thresholds are brought into estimates of
    sustainable development, the growth in wealth among the world's
    wealthy nations will in all probability turn out to have been less
    than present estimates would suggest. It may even have been negative.

    What I have sketched here is the correct way to determine whether
    contemporary economic development has been sustainable. It is also the
    correct way to evaluate public policy, for it tells me that a policy
    should be accepted if and only if it is expected to lead to an
    increase in wealth per capita. But you won't find any of this in
    Diamond's book. There is no evidence that he even realises he doesn't
    have the equipment to hand with which to study our interactions with
    nature. Nor, as far as I can judge, has he tried to engage with his
    economist colleagues to learn whether ecological economists have
    anything to say on the matter. The many people who will be reading
    Diamond's book will be fascinated by the historical case studies, but
    they will also be left with the impression that there is still no
    intellectual toolkit with which to deliberate over the most
    significant issue facing humanity today. Worse, they may not even
    notice they haven't got the tools. So readers will continue as either
    environmentalists or environmental sceptics, each locked into their
    own perspective. It is a great pity.

    [15]Partha Dasgupta's most recent book was Human Well-Being and the
    Natural Environment. He is the Frank Ramsey Professor of Economics at
    Cambridge and a fellow of St John's College.

References

   15. http://www.lrb.co.uk/contribhome.php?get=dasg01