15 July 2002

South Africa: What We Really Need is More Unsustainable Exploitation


Johannesburg — The concept of human development was contrived by socialists defeated by the triumph of market-driven prosperity. Ingenious indexes were distorted in favour of factors which interventionist governments were supposed to be providing more generously than free markets -- where there was so-called "market failure" -- such as improvements regarding water supply, air, equality, infant mortality, life expectancy, poverty, pensions, housing, literacy, crime and the environment.

However, it soon emerged that freer markets out-perform interventionism regardless of how human or environmental well being is measured. It turns out that human development indices, and specifically the UN's HDI, correlate even better with economic freedom than economic growth. Personal and economic freedom maximises both human development and material wealth.

Instead of rejoicing in this happy confluence of events, it is now asked -- is this development "sustainable". That meaningless adjective (in this context) is used to question all "exploitation" of "limited" or "non-renewable" resources.

It opposes consumption of a resource until it is gone. To the extent that anyone bothers to define "sustainable" it is used to qualify the word "development" and the term is then used to describe the use of resources by present generations without compromising future generations. By virtue of repeated use by academic and lay commentators such terms are presumed to have coherent meaning somewhere someone is presumed to have defined them intelligibly.

Drilling a borehole that will ultimately run dry could provide an unsustainable supply of clean water for a rural community. Sustainable development logic sets the long-term unsustainability of a village borehole against not drilling it, which sustains brutish poverty but not its victims. Such deadly sustainment of poverty is the opposite of human development. Human development demands that viable resources be consumed totally if needed now. The development thus achieved will provide the wealth and wellbeing with which to provide future needs from newly utilised resources.

South Africa's electrification programme aims to extend power to rural areas in a sustainable manner as well as address problems of endemic poverty, create jobs and eradicate crime. Government wants to combat urbanisation by boosting or "developing" remote communities, which is like trying to make water flow uphill. Around the world, an observable and desirable consequence of development is that rural areas become depopulated. People choose to migrate to urban centres where, in their own judgement, things are better and government enjoys substantially lower unit costs in providing social and physical infrastructure. Spontaneous urbanisation stimulates demand for farm products, enabling farmers to become wealthier, more technology- and capital-intensive, and, thus, more productive. Whether by apartheid's influx control and black-spot removals or by bringing water and electricity to remote villages, a policy of keeping impoverished country folk out of cities artificially is neither sustainable nor desirable.

In human terms, sustainable development is a tautology. Development, by its nature, enables human initiative to achieve and sustain the good society. We chop down jungles and drain swamps to plant annual crops. We dig up and burn coal to warm homes and power factories. We combine human ingenuity and capital to consume the planet's often-irreplaceable resources and create economic growth and prosperity.

Through technology and economics we gain access to ever more of every resource at ever-lower prices. Even as consumption, development and growth rates accelerate, known usable reserves of unrenewable deposits keep increasing, effectively without end. And technology spin-offs resulting from development include the discovery of and ability to utilise new resources, from hydroelectric and nuclear power now to harvesting asteroids and icebergs in future.

Yet it is deeply counterintuitive that reserves keep on rising. This leaves green luminaries in permanent denial, so that some even place bets on future resource-depletion, which they then lose ? which happened when green catastrophist, Paul Erlich, bet free market optimist, Julian Simon, that resources would become scarcer and thus costlier. Common sense suggests that non-renewables must run out, at least eventually (whatever that means). But what would have been the point of ancient Egyptians curtailing development whilst fretting at Earth Summits hosted by Rameses II about looming 20th-century shortages? Or medieval European greens demanding that peat deposits be consumed at retarded rates so as to leave enough for 25th century space travellers?

Post-modern philosophers may anguish over the "tyranny of urgency and the ephemeral". They may urge us to take responsibility for potential long-term consequences of our actions, or to carefully consider perishable species and the biosphere whose fate they believe, probably mistakenly, are in our hands, and to cherish and transmit our cultural and natural heritage to coming generations. Fine precepts indeed, if you are already affluent ? rather like not littering in Houghton ? but hardly appropriate for the world's impoverished billions as they try to get started.

We face many real concerns with appalling real risks, such as the Cold War, the Taleban and Middle East conflict. There is no need to scare our children by exaggerating or fabricating additional environmental concerns. If we are truly concerned about future generations we will allow the poor to prosper by harvesting jungles and draining swamps (romanticised as "rain forests" and "wetlands"). We will show our concern for their plight by helping them utilise natural resources, as the first world did at similar stages of development, thereby allowing their economies to grow rapidly and create wealth and technology so that their descendants can enjoy the riches of life.

Paradoxically, "unsustainable" development makes development truly sustainable.

Curtailed development makes human welfare unsustainable.

There is no "optimal balance" or "golden mean". Only very high rates of growth achieved by market-driven resource consumption, can lift the poor of the third world out of poverty, and then only after a few generations. Once poverty has declined there is a prospect of existing poor countries having sufficient wealth and technology to sustain development. That markets strike optimal balances spontaneously is apparent from the fact that mineral rights owners in South Africa are not exploiting their resources fast enough to please the government, hence its new "use or lose" nationalisation policy. It is not the market but governments that want to exhaust resources prematurely. Private owners reduce consumption automatically and speculatively when shortages arise with a view to higher prices in the future, when resources have greater value due to their scarcity. Governments and greens can relax. In liberated markets, ideal trade-offs between short- and long-term needs will arise spontaneously.

Leon Louw is the Executive Director of the Free Market Foundation. This article first appeared on the Free Market Foundation's website.

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