The dilemma that confronts human development is a fundamental one. The pursuit of economic growth has appeared to free modern society from the harsh struggle for existence which haunted earlier societies and which still characterises life in natural ecosystems. But the material profligacy of the industrial economy has brought with it unprecedented environmental degradation, and now threatens the long-term stability of our life-support systems.
How are we to deal with this dilemma? About the best that we have managed to achieve after 200 years or so of industrial development is the entrenchment of a well-worn conflict between economic rationale and environmental protection. Economic rationale demands continued growth; environmental protection demands constraint. Capitalism insists on the pursuit of profit; environmentalism tries to stand in its way. The eventual result may turn out to be an already flawed system further deflected from its ideal path: not utopia but economic and environmental failure.
In these circumstances, there is a high premium on any strategy which offers a potential resolution to the stalemate. This is why the measures described in earlier chapters of this book are of such importance to the industrial economy. They present substantial opportunities for improved environmental performance which does not compromise economic competitiveness. And by doing so, the preventive approach extends a bridge across the chasm which traditionally separates economic rationality from environmental concern.
At the same time, the demands of the new approach—and in particular the substantial dematerialisation of the industrial economy which it implies—challenge the underlying logic of the prevailing economic system, a logic which has been with us since before the industrial revolution. That logic suggests two things. First, it presents the production and sale of material goods as the essential basis for commercial activity. Second, it insists on a critical structural role for economic growth. Taken together these two factors threaten to undermine the potential benefits of preventive environmental management.
We have seen that the first of these factors is ripe for reappraisal. The emphasis on material throughput is a contingent aspect of a particular historical development. It is not an immutable necessity. Chapter 7 has shown that there are clear prospects for reformulating economic profitability. The basis of this reformulation is the transition from profitability based on the sale of material goods to profitability based on the provision of a service. This transition demands that we revisit (see Chapter 8) the relative pricing of materials and labour, and revise the fiscal regimes which affect those prices. It also requires careful attention to regulatory frameworks and institutional structures. But these commercial innovations offer the prospect of double or triple dividends to the industrial economy: better economic performance, reduced unemployment, and improved environmental quality.
In the long run, we must also address the need for economic growth. As Chapter 8 explained, there are two powerful arguments for it. First, the structure of the existing economic system demands growth for its own stability. Second, wealth has become associated with welfare. A careful comparative analysis of national economic performance with welfare (Figure 31) reveals that, in reality, economic growth has failed to deliver consistent rises in welfare for a variety of reasons. This is how the late Robert Kennedy once described it:
The gross national product includes air pollution and advertising for cigarettes, and ambulances to clear our streets of carnage. It counts special locks for our doors, and jails for the people who break them And if the gross national product includes all this, there is much that it does not comprehend. It does not allow for the health of our families, the quality of their education, or the joy of their play. It is indifferent to the decency of our factories and the safety of our streets alike. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials.. The gross national product measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion, nor our devotion to our country. It measures everything, in short, except that which makes life worthwhile.
The conclusion itself is not very surprising. Most of us recognise that welfare is not the same as wealth. Most of us realise that the quality of our lives is not determined solely by our annual expenditure on stereos, televisions and portable phones. Not all of us would agree that some expenditures may actually detract from our lives. But almost all of us would generally rank material possessions below certain non-material factors: family life, friends, community. When the British Social Science Research Council asked 1,500 people what were the most important elements in determining their quality of life, 71 per cent of the replies they got had little or nothing to do with economic goods.1
At the same time, the pursuit of profit still grips the industrial economy in a cycle of material production and consumption. The stability of the economy rests on the profit motive. The pursuit of profit provides the philosophical foundation of capitalism. It furnished the spark which ignited the industrial revolution. It remains the dominant rationale for individual and corporate behaviour and for national development worldwide.
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