Sunday, January 7, 2018

Nicholas Kerr: If not economic growth, then what?

In a column entitled Everything must go“, George Monbiot writes that economic growth “will destroy everything”. While he rails at length against growth, he doesn’t go into any detail about his preferred alternative. Moreover, his diatribe is mostly against consumption, whereas an increase in productivity (for example, doing more with less) is usually the primary driver of economic growth. Increased productivity does sometimes result in more consumption, but also increased savings and investment, among other things.

His main gripe is to do with growth’s environmental impact. However, he ignores the problems low economic growth brings and the benefits of a strong economy. Think about where the major environmental problems are today versus a generation or more ago. For starters, low growth USSR had terrible environmental catastrophes relative to the USA. But even in America we had LA smog and New York pollution. Economic growth brought prosperity and the wherewithal to address these issues, which no longer exist.

Today, the major environmental problems are in China, Brazil, India and other countries that are still relatively unfree from an economic standpoint. Economic growth and economic freedom are what they need to lift their populations out of poverty, so instead of focusing on feeding and housing their populations, they can take care of their environments, the way developed countries did.

It wasn’t until most Americans, not just the 1%, had high living standards, that our representatives passed legislation such as the Clean Air Act, Clean Water Act and created bodies such as the Environmental Protection Agency. Similarly in New Zealand, after socialism had been abandoned and a sustained period of economic growth had taken place, environmental legislation such as the Resource Management Act was passed and bodies such as the Department of Conservation were established. The same pattern has repeated itself throughout the world in developed countries.

One often hears complaints about first world countries shifting their factories and pollution offshore. “Countries” aren’t shifting their production, rather tens of thousands of entrepreneurs and corporations are making decisions on behalf of millions of individual shareholders and investors. In other words, only a tiny fraction of citizens are making any of the decisions to shift production anywhere.

Yet this complaint does a disservice to the efforts of companies like Apple to do good both in terms of the factories it uses as well as the people that are employed there. Yes, there are some companies that aren’t responsible, but increasingly they are the outliers and we should all vilify them.

It’s also important to think about the factory employees and understand why they choose to work there, with many if not most, going to drastic lengths to do so. As was the case during the Industrial Revolution in England, the alternative is far worse. Most employees have moved to cities from rural areas where there was little work and what was available, usually farming, was far more dangerous than the opportunities in factories. Even today in the United States agriculture is the number one industry for workplace deaths and worldwide is responsible for half of all workplace fatalities.

People employed in these factories are making rational choices. Leaving rural areas gets them away from far more dangerous work and pays a higher wage. It also removes them from things like higher incidences of malnutrition and preventable disease. Many of these factories also provide education and other benefits unavailable on the farms.

Who are we to question whether these countries should lift themselves out of poverty the same way generations of our own ancestors did? And if we did have the power to stop them, we’d be consigning millions of people to poverty.

In China (and other similar countries), the greatest environmental depredations haven’t come from factories and business, rather from government works. The Three Gorges Dam is exhibit number one, but there are plenty of other examples of similar disasters committed by the government. The USSR committed comparable environmental atrocities generations ago, as did countless other governments, including socialist New Zealand with its “Think Big” projects.

In “Shoe Dog“, the founder of Nike, Phil Knight, wrote about the good it and other companies strive to do in overseas factories, but seldom get any credit for. Most are doing their best to raise the bar of the countries they operate in – as Knight mentions, the factories Nike uses were far worse before it showed up. And like most good businesses, they are always striving to do better.
…Nike came under attack for conditions in our overseas factories—the so-called sweatshop controversy. Whenever reporters said a factory was unsatisfactory, they never said how much better it was than the day we first went in. They never said how hard we’d worked with our factory partners to upgrade conditions, to make them safer and cleaner. 
They never said these factories weren’t ours, that we were renters, one among many tenants. They simply searched until they found a worker with complaints about conditions, and they used that worker to vilify us, and only us, knowing our name would generate maximum publicity. 
Of course my handling of the crisis only made it worse. Angry, hurt, I often reacted with self-righteousness, petulance, anger. On some level I knew my reaction was toxic, counterproductive, but I couldn’t stop myself. It’s just not easy to remain even-keeled when you wake up one day, thinking you’re creating jobs and helping poor countries modernize and enabling athletes to achieve greatness, only to find yourself being burned in effigy outside the flagship retail store in your own hometown. 
The company reacted as I did. Emotionally. Everyone was reeling. Many late nights in Beaverton, you’d find all the lights on, and soul-searching conversations taking place in various conference rooms and offices. Though we knew that much of the criticism was unjust, that Nike was a symbol, a scapegoat, more than the true culprit, all of that was beside the point. We had to admit: We could do better. 
We told ourselves: We must do better. 
Then we told the world: Just watch. We’ll make our factories shining examples. 
And we did. In the ten years since the bad headlines and lurid exposés, we’ve used the crisis to reinvent the entire company. 
For instance. One of the worst things about a shoe factory use to be the rubber room, where uppers and soles are bonded. The fumes are choking, toxic, cancer-causing. So we invented a water-based bonding agent that gives off no fumes, thereby eliminating 97 percent of the carcinogens in the air. Then we gave this invention to our competitors, handed it over to anyone who wanted it. 
They all did. Nearly all of them now use it. 
One of many, many examples. 
We’ve gone from a target of reformers to a dominant player in the factory reform movement. Today the factories that make our products are among the best in the world. An official at the United Nations recently said so: Nike is the gold standard by which we measure all apparel factories.
Monbiot seems to think developed countries shouldn’t allow individual entrepreneurs or corporations to make these sorts of decisions. He wants governments to have tighter control of the means of production and limit the freedoms of its citizens. These are exactly the sorts of controls that have wreaked the worst environmental havoc in the history of the planet over the past century. And his “solutions” would ultimately do even more damage.

Nicholas Kerr, who grew up in New Zealand, is a marketing consultant in Seattle, where he lives with his wife and two small children. In his spare time he blogs at The Kerrant.

1 comment:

Glenn G said...
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Typical small poppy syndrome. Trouble with socialism is that it needs capitalism to generate money so that it can then fund socialism, so they will shoot themselves in the foot again by trying to stifle capitalism. The last labour govt. ran NZ into the ground a year before the GFC & it took years for the Nat Govt to get us back on track & now they are having a big spendathon & already the wheels are starting to fall off

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