Why is the global economy constrained by the energy cost of energy?
That capitalism is the best engine for economic growth is now understood throughout the Third World, the former Second World, andsave for some Marxist sects huddled in academiaeven the First World. Also, it is universally understood that capitalism can do its good work only where, and as long as, governments follow conservative economic policies. From Shanghai to Prague, everyone now comes to us conservatives for the Rx on economic growth. Clearly, today we enjoy a strong wind in our sails.
But if we don't know where we are sailing, every wind will take us there. To be growing is not a destinationemphatically not a conservative one. Conservatives who propagate economic growth as mankind's highest and overarching goal place themselves in bad company. Benito Mussolini decreed that Fascists must keep expanding Italy's productive capacity. And all Leninist regimes kept promising abundant economic growth; a goal of such supreme value to them that they constantly fabricatedwith mind-numbingmendacity statistics on the growth allegedly accomplished. Hurray, a fifty percent increase in steel production, a hundred percent increase in the potato harvest!
Means don't justify the end. Had communist economies grown vigorously everywhere, would that make communism the desired system for all peoples? The fabulous success of conservative economic policies has seduced many in our midst to mistake economic growth as the defining attribute of conservatism. These brethren now believe that conservative policies can and must make all good things in society grow, and that this good growth can and must continue indefinitely. They act as if conservative thought were nothing but the philosophy of perpetual good growth. Yet, the intended consequences of growthgetting more of all the good things in life are held in favor by almost any political philosophy. It is the unintended consequences that these conservatives ignore.
Looking at the world through the wrong end of the economist's telescope, our growth enthusiasts regard the standard measures of economic increases (such as in the nation's Gross National Product or in average per capita income) as the sovereign yardstick for evaluating all change in society. Growth in these measures is the arrow of progress; it is the compass needle that shows whether any correlated social change is good, bad, or indifferent.
This way of evaluating society's progress or decline has been elaborated and enriched to create an ideology of truly metaphysical sweepthe Utopia of Perpetual Growth. This ideology holds that continuing population growth, for example, is a good thing if it correlates with economic growth. Likewise, growth in population density is to be welcomed if it is associated with increases in GNP or per capita income. The same, of course, holds true for an increasing flow of immigration. And growth in international travel, increases in global communications, growth in the number of automobiles or television sets per capita, longer vacations, an increase in the average length of lifeall these changes represent "good" growth to be cheered along, provided they are more or less correlated with the standard measures of economic growth.
For any social change to be exempt from this rule requires a compelling case. Violent crime normally qualifies as an exception. Even if violent crime rates were perfectly correlated with economic growth, few conservatives would claim that, therefore, crime is a good thing. But for lesser irritants that may correlate with economic growthsuch as traffic congestion or pollution of beachesthe growth utopianism has two things to say. First, these irritants must be tolerated as a price worth paying for economic growth. Second such tolerance will be richly rewardedas if by divine justicebecause further economic growth, precisely, will eliminate the squalor and congestion. Indeed, only economic growth can overcome these irritants.
The idea that economic growth is the arrow of progress sounds superficially plausible because many historic examples suggest that, within reason, it holds true. Economic growth brought by the Industrial Revolution and by capitalism's triumphant march through the 1 9th and 20th century has vastly bettered the conditions of human existence. This march of triumph overcame Dickensian squalor in London, the threat of famine in Ireland, widespread poverty in Japan, and in recent decades brought new prosperity and greater freedom from South Korea to Turkey.
What gives the Utopia of Perpetual Growth its veneer of cheerfulness is that it asserts there is no end to this progress, no limit to all this good growth. The utopianism holds that economic growthtogether with correlated growth in other social phenomena (such as population size or density)is a grand historic process; a process that can be perpetual thanks to the laws of nature and rules of history, and that must be made perpetual by dint of man's efforts.
Any limits deliberately imposed on growth by government or private groups are a perversiona suicidal twisting around of the arrow of progress to point it against our own hearts. Limits that nature might impose are nothing but temporary hurdles, challenges to be overcome byyou guessed itfurther growth. Oh yes, in the blue mist of cosmology a misanthrope might descry some ultimate limits; yet even those should be regarded as highly speculative. After all, who can know whether for mankind the planet earth proves to be a finite homestead, or whether all limits will dissolve in a universe that is forever expanding.
The utopianism also asserts that perpetual growth will benefit everyone. A rising tide lifts all boats. If you are one of those who is worried about taxes you are told that the process of perpetual growth will bring relief. A growing economy enables the government to feed its expanding appetite without raising taxes; indeed, if growth is brisk, tax rates can be lowered. Or better yet, we can anticipate these benefits by lowering taxes first, which will accelerate economic growth and in turn make it easy to lower taxes further.
If you are one of those who is worried about the deficit, perpetual growth is also your answer. Economic growth will expand government revenues until they balance the budget. Or, if the deficit should then expand againas seems likelyfurther economic growth will come to the rescue. Like the golden pot at the end of the rainbow, the solution is always waiting for us at the horizon.
The strong growth in the US economy during the Reagan years did a great deal of good. Americans in need of jobs found employment, those holding jobs came higher wages, many people on welfare received better benefits, and the nation regained its self-confidence. As Martin Anderson put it in his splendid book on the Reagan Revolution: "It was the greatest economic expansion in: history. Wealth poured from the factories of the Unite States and Americans got richer and richer."
And the government grew and grew. "Spending on social welfare programs," writes Martin Anderson, "increased surely and steadily, perhaps more than Reagan would have liked." Government support for agriculture experienced the biggest percentage increase far higher than defense and at a far steeper rate than the national economy. "In 1980 the federal government paid US farmers and ranchers $8.8 billion", recalls Anderson; seven years later it "was doling out over $31 billion a year." The role of the Federal government; as provider of health care also grew dramatically in this period. So did the amount of taxpayer's money spent on non-military space flight (demanded by some for scientific experiments by others as entertainment, and by NASA as its entitlement). And Congressalways mindful of itselfincreased sharply the tax dollars spent on Congress.
Evidently, the law of unintended consequences must have been at work here. (That is, unintended by Ronald Reagan and those who supported his philosophy about big government). George Will may have been a bit too generous when he wrote, in his recent book Restoration, that conservatives do not merely take this law seriously, "they often are conservatives largely because of it and all that it intimates about political life." Would that this were true for some of the most articulate American conservatives today, who cheerfully keep praising the glories of economic growth. Yet, like the little boy who angrily kicks the table after banging his knee against it, they invariably blame bad government for all the evil consequences that growth may entail.
A rising tide, yes, lifts all boats. It lifts the tax collector's boat. It enables every Congressional committee to spend more of the people's money. It "forces" every bureau chief within the Federal bureaucracy to expand his staff and offices "just to keep up with growth". The rising tide also helps governments to cover up gross malfeasance; the citizenry may have to wait for the ebb tide of a recession to see it exposed. At that point, when the body politic is deprived of the spoils that can flow so generously from continuing growth, it may at last be goaded into starting a clean-up. In Japan, it was the recent recessionnot "the rising tide"that has helped to reform, and perhaps save, the democratic system. In Italy, it was the cessation of economic growth that provoked the scrutiny and political discontent which emboldened Rome to take on the mafia. In the United States, it was the ebb tide in real estate that brought action against the S&L crooks. A halt in economic growth of course, will not necessarily expose corruption or help shrink government. The steep economic decline after 1929 ushered in one of the largest government expansions.
Cause and effect are hard to trace in human affairs. Those of us who wish to proffer policy advice need to ponder about circuitous routes of causation. Yet, the message from our growth utopians that most voters will hear is that this forever unfolding cornucopia depends not on how wisely they live and how hard they work, but on how they vote. Or to put it more crudely: the promised:, gratification depends on the government. The people thus become conditioned to regard all good things that come with economic growth as an entitlement owed to them by the government. They will have become hooked on the big-government addiction.
So the fix is on. The addiction is bipartisan. Few of our conservative lawmakers enjoy enough support among their voters to disappoint all those who have been seduced by the growth utopia. Republicans will have to join Democrats to vote for government programsnot because of their merit but because canceling them would deny some group its growth entitlement. Hence, government must give away grazing and mineral rights on Western lands, bestow perpetual benefits through the Rural Electrification Administration, subsidize rich peanut farmers and the sugar industry, and so on. Behold the left and the right are agreed that big government is good for growth!
It is bad enough if some conservatives demand more government just to have government disperse more economic growth. It is folly, if they also drive many of our potential supporters into the enemy camp merely to humor their growth utopianism. Alas, the growth utopians in our midst today attack anyone thinking favorably of the C-wordthe people favorably disposed toward conservation, the very people who know, as Edmund Burke put it, "that they should not think it among their rights to cut off the entail, or commit waste on the inheritance." Everywhere and all the time, our Jacobins of growth attack those who wish to conserve forests, seashores, or wildlife. They ridicule any conservationist policy that seeks to preserve our tangible heritage. They oppose all conservationist appeals for slowing immigration. And with these noisy attacks, they are drowning out promising new ideas for market-based approaches to conservation that other conservatives developed; approaches that seek to avoid excessive litigation and government intrusion.
Worse than that, our growth utopians do not realize that with their attacks on the C-word they are driving into the camp of our political opponents a great many young Americans who are predisposed, by sentiment, toward conservatism. William F. Buckley rightly cautioned us that we ought to keep our eyes on "the metaphysical implications" of the environmental movement. As he put it, "it is essentially conservative to conserve".
Many who are attracted to the environmental movement could be our best recruits. We should not heap ridicule on their anxieties about man's revolutionary impact on nature (even if the particular anxieties may be ill founded). We should not condemn their desire to conserve (even if the means they advocate may be badly chosen). And if a touch of pessimism beclouds the philosophy of the environmental movement, this, too, is healthy. True conservativesunlike utopiansdo not promise the perfect future.
Citizens who fear for our vanishing patrimony in nature drink from a well-spring of emotions that nourishes the most enduring conservative convictions. These convictions, since they are rooted in the heart, will survive adversity. If political convictions are anchored only in the intellect they will be blown away by the first ill wind. Young Americans whose deepest convictions draw them to the environmental movement today could become some of the finest supporters of our conservative movement tomorrow. If only we would let them.
Instead, by ridiculing every environmental concern and neglecting sensible solutions, our own Jacobins have invited the revolutionary Left to increase its political strength. We should envy, indeed, the skill of the Left in bringing under its control so much of the worldwide environmental movement. We should weep, however, over our self-destructive folly in assisting this takeover.
Folly likes company. The growth utopians in our midst are not only kicking conservation-minded citizens into the enemy camp, but with their advocacy of high levels of immigration, they are also alienating many traditional conservative voters. A great many Americans of conservative persuasion do not regard their country's borders as merely an obstacle to global free trade, an obsolete "protectionist" contraption that must be done away with. They value the borders as a breakwater that will protect theiryes, their nation's social fabric and political culture in a stormy world.
Yet, our Jacobins insist on open borders and "free immigration". Whoever disagrees is a "racist"'; never mind that among American blacks, whose forefathers helped build this country, many also disagree. And whoever proposes that the United States should regain control if its borders will be derided as wanting a "Berlin Wall". (Erich Honecker must have been mighty pleased to see distinguished Americans confirm what he always asserted about his wall: that it was never meant to imprison his people, but to keep out "undocumented" Westerners.)
The extreme Left in America is delighted. Like their soul mates in Europe, they have long pined for a split among conservatives that would create a faction they could attack as "fascist", thus forcing all other conservatives to spend their entire time proving that they, by contrast, are not fascist. This stratagem worked in France and Germany, until, the conservative parties at last began to cope with immigration, and thus sharply curtailed their loss of votes to "anti-immigration" splinter parties.
Economic growth and population growth are closely intertwined, both entangled in a dense web of social, political, demographic, and economic forces. Does population growth stimulate economic growth, or is it the other way around? Do increasing population densities negate the benefits of economic growth, or are they the very engine for a growing economy?
To disentangle this knurly twist of cause and effect takes more than a simplistic statistical correlation. Yet, our growth utopians, to prove that high population densities bring prosperity, invariably introduce their favorite success storyHong Kong. According to a Wall Street Journal editorial, the physical limit to the number of people that Hong Kong could absorb "in a short time" has "not even been approached"; more immigration would help since Hong Kong "continues to suffer a labor shortage."
Higher population densities, to be sure, can help economic growthby permitting a more efficient division of labor, stimulating trade, and enhancing financial markets. But more often than not, higher densities will lead to more government. More crowding means more people will bump into each other; and to mitigate these bumps, people nowadays demandunfortunatelythat government interfere ever more. The more populations are culturally and linguistically divided, the more irritating the bumps will behence the louder the demands for government-determined outcomes. To be sure, we conservatives know that we want less government, not more. But many in our midst fail to see that an unintended consequence of all the good growth they are advocating will be more government.
Conservatives addicted to the Utopia of Perpetual Growth, nonetheless, tell us not to worry: an ebullient free market economy (such as in Hong Kong!) will provide taller apartment buildings and larger sewer pipes to accommodate an ever-growing population. To worry about population growth, they tell us, is incorrect thinking, called Malthusianism. Thomas Malthus had this theory that population tends to grow faster than the food supply, pushing mankind toward misery. But since the end of the 18th century when Maltus wrote his book, food supplies grew easily as fast as population unless foolish government policies interfered.
Because of this history, the pros and cons of population growth continue to be debated as an economic question and, adnauseam, as a question of accommodating more people by feeding them. One might call this the bovine rebuttal to Thomas Malthus. Given capitalist agriculture, it is said, an ever growing human herd will always have enough fodder. Yesterday's world population was two billion people, today's is five billion, tomorrow's will be ten. As the global economy becomes more and more integrated, we will all blend into one growing family, it is said. The happy whirligig will go round and round, faster and faster, more people and more things, at home and abroad, more things and more people, abroad and at home.
Man, however, does not live by fodder alone. Nor can one measure human progress by the growth in per capita income alone. William J. Bennett's Index of Leading Cultural Indicators shows this all too clearly. Measured by many of these indicators, America suffered a cultural decline even during the fabulous economic growth of the 1980s, "the seven fat years" as Robert Bartley's engaging book calls them. For some of these indicators that correlate nicely with past economic growth, even the most dogmatic believers in the growth utopia would agree the trend was bad. Example: illegitimate births quintupled since 1960. Other Bennett indicators, however, they might regard as desirable correlates of "good" growth; for example, the increase in average daily TV viewing. Economic growth brings better TV sets, cheaper TV sets, more TV programs, more leisure, and hence, more time spent in front of the tube.
Conservatives ought to focus less on the bovine interpretation of population growth and pay more attention to its cultural and political implications. Never mind that a growing world economy can feed all the people. The right question for us conservatives is whether cultural values can keep up with this multiplication, and whether the pressures for more government can be kept in check.
Population growth is the paramount, the most elemental anti-conservative force. It unleashes a flood of social change that will cascade onto every level of society. It creates irresistible pressures for farflung, and usually irreversible government interventions, allegedly to cope with all the social changes that rapid population growth has unleashed. It thus helps the radical left to garner political support for its social engineering schemes. It dilutes the reach of religious institutions that seek to preserve society's moral fiber. It empowers the unprincipled and the rootless to tear down vastly more civilizing traditions and riches of culture than they will ever create.
Some conservationists have it wrong: an imminent scarcity of raw materials is not the reason why we need to be concerned about population growth. Throughout this century, predictions have been made that mankind faced calamity because it was running out of anthracite or copper, petroleum or fresh water, or some other vital resource for which there could be no substitute. These alleged "limits of growth" were foolish.
The growth utopians in our midst delight in mocking this foolishness. It is of course easier, when confronted by a vexing question to ridicule silly answers others have given than to search for the right answer oneself. But the question will not go away. Either we cling to the belief that the growth of all good things in our society can be perpetual, or we must address the question of limits. As John Gray wrote in his timely book Beyond the New Right (1993), "the project of a social order that does not rest on the prospect of indefinite future betterment creates problems for policy that have as yet been barely addressed by conventional thought, including the mainstream of conservative philosophy."
A stable population would be a critical component of the social order that John Gray refers to. Many population experts see such stability come about through the "demographic transition"the decline in birth rates often associated with growing prosperity. (How soon this transition might be completed, whether it can take hold in all cultures, and whether it will not be reversed, are open questions.)
Nothing in the growth ideology is more indicative of its utopianism than what it says about the demographic transition. On the one hand, it holds that an increasing population is a godsend for economic growth. On the other hand, it promises that economic growth, all by itself, will usher in the demographic transition and thus halt population growth. Yet, utopianism ignores the cultural conditions that are necessary for the transition to take hold. On the contrary, as soon as a rich country's birth rates have declined enough to keep its population stable, the utopia's high priests condemn such "stagnation", warn of economic and moral decline, a crippling labor shortage, and an aging nation, and insist that population growth must promptly resumeby admitting large numbers of immigrants.
Thus, the utopianism is unmasked as a gigantic, global Ponzi scheme, where each generation can collect its growth entitlement only if a compliant and larger generation steps into the queue behind it. Should we conservatives let this utopianism dominate our movement, no body would be left to stop the fraud and the whole pyramid would eventually collapse, engulfing everyone in vast misery. The cause of this collapse would not be a shortage of material goods but the destruction of society's conservative conscience by our Jacobins of growth.
Fred Charles Ikle a Distinguished Scholar at the Center for Strategic and International Studies, served as under secretary of defense for policy in the Reagan administration and as director of the U.S. Arms Control and Disarmament Agency in the Ford administration.