Message-ID: <32D2B15E.F72@mind.net> Date: Tue, 7 Jan 1997 20:26:06 +0000 From: "B. Diamond" <mailto:bdiamond@MIND.NET> Subject: Re: Why capitalism is NOT sustainable -Reply To: Multiple recipients of list DEVEL-L <mailto:DEVEL-L@AMERICAN.EDU>
Tu and Bob Myers wrote:> Government financing and price control also make goods and services more
> easily available. Are goods and services provided at artificially low
> prices, produced by facilities financed by these methods "acceptable", but
> not the same items produced by a facility financed by capitalism?
No! Subsidies create even more of an externality, which is exactly why subsidies are so sought after by venture-capitalists. If, for example, federal grazing fees were raised from the current (heavily) subsidized $1.18 per AUM to the market rate of approx. $10 per AUM, cattle producers would have to raise prices in order to maintain the same profit margins. But if the "real costs" of beef were passed on to consumers, they may not consume as much beef as they do now, and profit levels would drop. The problem with this is that the majority (the taxpayers) pay for the subsidy, while only the minority (ranchers) reap the profits. These subsidies, taxbreaks, et al, have also become a major part of our economic system, even though they fly in the face of the founding principles of capitalism which demand a market economy in which the *market* decides the price of goods and services. Yet I don't see corporate America lining up to give back their "welfare" checks, do you? To try and bring this back to a topic at least remotely related to the purpose of this list :) no matter what you call the various economic systems, the fact remains that gap between the rich and poor is ever-widening, and this does relate directly to the development projects we design/implement. According to "The State of the World, 1996," the ratio between income in the richest one fifth countries and the poorest one fifth countries has widened from 30:1 in 1960 to 61:1 in 1991. Critics of those who seek to change our current system claim essentially that we "cannot have our cake and eat it too," that is that we cannot have the benifits of the modern world (health care, computers, etc.) without also having the negatives (pollution, exploited resources, etc.) but I'd suggest that neither can they have their cake and eat it too, for we simply cannot maintain our current standard of living, and simultaneously meet the needs of an exponentially growing population; and still be sustainable. At some point, there must be sacrifice. The inherant problem with capitalism (outside of my usual rhetoric about over-consumption and selfishness ;) ) is the simple fact that it has an "addiction" for growth. In order to maintain working capital, a sufficient rate of annual return is needed. In order to perpetuate capital, (and offset inflation, etc.) an increasing annual rate of return is the most desirable. Third (and second) world development projects are usually designed to expand markets to perpetuate said growth, IMHO any societal benefit is usually merely a consequence of said expansion--not the force behind it. As people involved with development projects, I genuinely believe that we all are really trying to "help,' despite our differant feelings as to what "helps" more. But I think we must carefully examine the ends we seek. It took us 20 million years to reach a human population of 1 billion, and a mere 150 more years to reach 6 billion. We must find a way to reach sustainability.
B. Diamond