Selling Out

AuthorHouse

Contents

Introduction..................................................................................................ixChapter One Grow Up: How Economic Growth Became a Religion...................................................1Chapter Two Measuring Up: Growth Measurements are Misleading.................................................17Chapter Three Work Up: Growth Does Not Reflect the Plight of Workers.........................................31Chapter Four Pay Up: The Benefits of Growth Exclude the Poor.................................................43Chapter Five Drink Up: Shrinking the Supply of Potable Water.................................................59Chapter Six Cut Up: Deforestation and its Ramifications......................................................73Chapter Seven Muck Up: Hazardous Waste and our Health........................................................81Chapter Eight Hit Up: Exploiting Developing Countries for Cheap Resources and Labor..........................101Chapter Nine Ad Up: Paying for Political Engagement: the marketplace of political change.....................119Chapter Ten Act Up: How to Have an Impact....................................................................129Bibliography..................................................................................................137

Chapter One

Before the economic crisis greatly reduced people's disposable income, consumers were engaged in an orgy of frenetic buying in order to be seen in the right clothes or to disport themselves with the latest electronic gadgets. There is nothing intrinsically or morally wrong with indulging oneself in a life-long buying spree since the problem lies not with the individual consumer but with the invisible overall impact of consumption on ourselves and the planet.

Manufacturing, transporting, providing energy for and disposing of consumer goods depletes resources, pollutes the environment, generates waste and requires energy. The cumulative impact of world-wide consumption involving all these phases in the production cycle has had a devastating and deleterious effect on the planet and on all living species. For example, climate change, toxic chemicals in the air, food and water, destruction of the ocean ecosystem, destruction of the rain forests, a growing shortage of drinking water, loss of biodiversity, conflicts over a declining inventory of resources, and human suffering are only some of the results of manufacturing the products which people believe they need. These effects will be discussed further in another chapter.

The disastrous consequences of consumption beg the question as to why people feel the need to consume so much. Is it part of human nature, is it taught or a combination of both? Western culture profoundly etches into our psyches the need to define ourselves in terms of material possessions and to blur the distinction between needs and wants. Furthermore, we have been conditioned to ignore the overall consequences of consumption.

North Americans are so seduced by new technologies and the huge benefits they offer, the temptation to buy the dazzlingly sophisticated new products becomes irresistible.

For example, when cell phones first appeared on the market, people bought them for use in the case of an emergency but also as an extension of their land line. They soon became attached to people's ears. Then advancement in cell phone technology converted cell phones into computers, cameras, and television sets. Now, it carried all your electronic gadgets in one small electronic device that could fit into your pocket.

Next, blackberries appeared on the market tempting consumers with all the features of cell phones but also a GPS system, internet capabilities and more, serving as the new all-purpose electronic device. Blackberries expanded people's communication capabilities to such a high level that they could sit in the same room with someone and send them a text message. All these electronic methods of electronic communication are destroying real human to human exchanges. In the not-too-distant future, I can envision a new addiction group, Blackberries Anonymous.

As well, the antediluvian concept of maps for navigating to your destination was becoming unnecessary. Rather than waste time and brainpower reading a map, people can now watch the GPS system on their dashboard or blackberry and drive to any location in North America.

Another example, television, underwent many technological advances and on each occasion motivated consumers to avail themselves of the latest technological wizardry. When Beta video players became available, movie fanatics could purchase one and watch movies at home. Then VHS replaced Beta as the technology of choice forcing movie buffs to replace their Beta players and videos. But it didn't end there. DVD's replaced VHS as the latest technology for showing movies. Now it's HD DVDs. Every time a new technology replaced the old one, people who collected movies had to dispose of the old device and buy the new one and then also had to replace all their movies.

It is true that the more sophisticated and advanced devices are a greater convenience and offer more benefits but the consumer is not conscious of the overall impact of these products on the environment. The problem with consuming at current levels is its overall impact, not a reflection of the consumer.

Depletion of resources, pollution, and waste were not factors that had a noticeable impact on people's purchasing habits. For instance, when you buy a cell phone, you are not remotely aware of the six year old who mined the coltan in the Congo, the theft of that country's resources, or the death of millions of Congolese as countries scramble to purloin its resources. Nor are you aware of the women assembling the cell phone in a sweatshop who are exposed to dangerous chemicals. There are also energy costs in transporting the cell phone to the distributing centre in North America. Ultimately, the cell phone will become garbage at which point the toxic chemicals locked in the electronic parts will be released into the atmosphere or groundwater.

By continuing to buy new products, consumers guarantee increasing consumption thus satisfying the underlying economic imperative of growth in production on which prosperity is speciously based in most western economic systems. Growth has not really brought prosperity to everyone, the proof of which is the growing inequality of wealth in North America and the small percentage of people and corporations who benefit from expanding wealth.

Maintaining growth was industries' plan to ensure a steadily growing level of consumption so that their singular objective, the maximization of profits, would be realized on an ongoing basis. The fear that consumers would only buy what they needed would be alleviated through a plan to cultivate artificial demand for products through subterfuge.

Our impulse to devote so much of our disposable income or borrowed money obtained through credit cards or lines of credits is not a natural phenomenon but the result of a deliberate strategy of the government and business to ensure a constant growth in profits.

The crusade to guarantee a never-ending growing economy began after World War II when one of the major architects of American foreign policy, George Kennan, stated on February 24, 1948, that:

We have about 50% of the world's wealth but only 6.3% of its population. We can not deceive ourselves that we can afford the luxury of altruism and world benefaction. We should cease to talk about such vague and unreal objectives as human rights, the raising of living standards and democratization. The day is not far off when we are going to have to deal in straight power concepts. (Review of Current Trends in U.S. Foreign Policy, George Kennan)

Kennan was saying that in order to maintain and increase the wealth of the United States, the U.S. government must be prepared to use force if necessary to protect America's access to natural resources, cheap labour, foreign markets and opportunities for investment. According to Kennan, wealth, or in other words, production, is America's number one priority not human rights, democracy nor the standard of living in other nations.

To persuade people to continually consume indefinitely, a number of economic and political leaders defined the ongoing acquisition of a growing number of products as the path to a happy and successful life. The philosophy that consumption was the path to fulfillment and a rewarding life was articulated by economist Victor Lebow in his paper Price Competition in 1955 in the Journal of Retailing when he argued that:

Our enormously productive economy ... demands that we make consumption our way of life, that we convert the buying and use of goods into rituals, that we seek our spiritual satisfaction, our ego satisfaction, in consumption ... We need things consumed, burned up, worn out, replaced, and discarded at an ever increasing rate.

Arthur F. Burns, Chairmen of the Council of Economic advisors under President Eisenhower, exceeded Lebow's orgasmic faith in the wonders of growth when he evangelized that: "The American economy's ultimate purpose is to produce more consumer goods." If Burns could observe the behavior of consumers today, he would feel a profound sense of satisfaction in the fact that consumers have reached Nirvana.

One year before Lebow proclaimed the sanctity of consumption, Brooks Stevens, an industrial designer, elucidated the method by which growing consumption could be sustained indefinitely. At a meeting of advertising agency executives in Minneapolis, he coined the phrase "planned obsolescence" although he did not invent the concept. He defined "planned obsolescence" as "instilling in the buyer the desire to own something a little newer, a little better, a little sooner than is necessary". (Industrial Strength Design: How Brook Stevens Shaped your World, Glen Adamson) Although Stevens' statement was controversial at the time, the various forms of obsolescence have become the backbone of indefinite economic growth.

Imbuing the imperative of growth with scholarly legitimacy, John Maynard Keynes, a British economist whose ideas were a major influence on modern economic and political theory until the 1970s, formulated a method to maintain growth despite downturns in the economy or even recessions.

One of his main contributions to economics was the principle that government has the power to increase production, incomes and jobs through government deficit spending. According to Robert B. Reich, Secretary of Labour under former President Bill Clinton:

Keynes' basic idea was simple. In order to keep people fully employed, governments have to run deficits when the economy is slowing. That's because the private sector won't invest enough. As their markets become saturated, business reduce their investments, setting in motion a dangerous cycle: less investment, fewer jobs, less consumption. (John Maynard Keynes, Robert B. Reich)

Keynes believed that in times of slow business investment, it was the government's responsibility to engage in expansionary deficit spending to increase consumption by borrowing money and spending it. Although Keynes was not advocating unfettered growth, he reinforced the notion that consumption was the key to solving a number of economic problems.

Despite the fact that Keynes theories were discredited in the 1970s by the new rising star in economics, Milton Friedman, growth remained a key objective in government policy-making.

Milton Friedman, Nobel Prize winner and leader of the Chicago School of Economics, refuted Keynes theories to a large extent based on Keynes belief in the positive role of government in economic decision-making. Friedman was a strong advocate of the primary role of the market in making economic decisions. Although he disagreed with most of Keynes theories, he also believed in the importance of growth. According to Friedman:

What kind of society isn't structured on greed? The problem of social organization is how to set up an arrangement under which greed will do the least harm; capitalism is that kind of a system. (Capitalism and Freedom, Milton Friedman)

From an economist standpoint fifty years ago, the main parameters in economic theories, apart from growth, were unemployment, inflation, interest rates, the money supply, trade, deficit, debt, trade, and the current accounts balance. Monetary and fiscal policy were designed to encourage the maximum growth in the economy to promote employment and a higher standard of living while minimizing the risk of high inflation or deflation or damage to the value of the dollar.. In the 1950's there was virtually no awareness about the negative impact of government economic policies on people and the environment and the ravages of growth.

The first hint that a major resource was approaching a limit was when M. King Hubbert predicted in 1956 that United States oil production would peak between 1965 and 1970. Peak oil means that the maximum rate of production has been reached pursuant to which the rate of production enters a terminal decline. Peak oil in the United States occurred around 1970. Many oil-producing nations have already passed their peak such as Venezuela, Libya, Iran, Nigeria, Indonesia, Oman, and Mexico. Although the science of estimating when oil production reaches its peak is controversial, Hubbert's prediction should have set off some alarm bells.

Another warning was issued when Rachael Carson wrote The Silent Spring in 1962 in order to call attention to the dangers of pesticides on human health and in particular, DDT. The Chemical industry lambasted her in order to destroy her credibility but environmental awareness was hatched.

Then in 1972, the crisis of growth was recognized by a group of scientists who formed an organization called "The Club of Rome". Phase One of the project was conducted at MIT which:

Examined the five basic factors that determine, and therefore, ultimately limit growth on this planet - population, agriculture, natural resources, industrial production, and pollution ... Our conclusions from these extrapolations is ... that the short doubling times [of exponential growth] of many of man's activities ... will bring us closer to the limits of growth of these activities surprisingly soon ... The crux of the matter is not only whether the human species will survive, but even more whether it can survive without falling into a state of worthless existence. (The Limits to Growth, Donella H. Meadows, Dennis Meadows, Jorgen Randers, William W. Behrens III, p.11)

Since 1972, there has been a steady stream of literature warning governments that continually ignoring the dangers of unsustainable growth is risking human life and the ecosystem. One of the crucial warnings was that the atmosphere, water supply, and land are not infinite resources and that continually treating them as such is short-sighted and foolish.

Today, there are a myriad of environmental organizations demanding that governments rethink their priorities when formulating social and economic policy. Tragically, growth is still virtually unsustainable and persists as the number one priority in economic policy, the proof of which is the ongoing pursuit of fossil fuels and the absurdly inadequate funding for adopting alternatives.

One of the important factors contributing to the notion that growth was the key to a strong, healthy economy was the litany of presidential economic advisors who strongly advocated for the miraculous powers of growth.

The Council of Economic Advisors is an agency of the executive branch of government consisting of three respected economists who advise the president on economic policy. It provides much of the economic policy for the White House. Moreover, the Council of Economic Advisors submits a report on the economy to the president every year. Without exception, these advisors were fully committed to expansionary economic policies to lower unemployment and raise the standard of living. The problem is that they were neither aware of nor cared about unsustainable growth. In fairness to these advisors, in the first decades after World War II, there was virtually no awareness of the concept of sustainability.

For example, in the 1953 Report, Arthur F. Burns was its Chairman at the time, reveals the firm commitment to maintaining economic growth when Burns stated that:

I believe that our resources are sufficiently plentiful to reach a 1953 national product as high or even higher than that set out in this review. The idea, often expressed by this Council, and in fact by other persons through the ages, that a free and great people should be able to use all of what they have the ability to produce seems to me so commonplace ... This issue - whether we shall shrink from or measure up to the challenge of potential abundance-is perhaps the supreme issue of the Twentieth Century. (Annual Economic Review, The Council of Economic Advisors)

Excerpts from the reports of later Chairman reflect this commitment to unsustainable growth as evidenced by the following examples:

1961 - Raymond J Saulnier under Eisenhower: "Throughout 1958, Government expenditures for goods and services continued to rise fairly steadily ... The expansion of the economy proceeded vigorously, supported by steadily mounting consumption." 1965 - Gardiner Ackley under President Johnson: "A wide consensus of responsible opinion now recognizes that Federal fiscal policy must be geared to keep the economy moving ahead. It [Annual Report] attempts to dissect the unprecedented long and healthy expansion of the past four years." 1973 - Herbert Stein under President Nixon: "There was a rapid acceleration in the rate of growth in real output ... The rise in production and employment that became particularly evident by midyear created a growing mood of confidence ... and helped to bolster private investment and personal consumption." 1977 - Charles Schulter under President Carter: "Strong and steady growth in the U.S. economy was also needed to help sustain the pace of economic expansion among the nations of the Western World."

(Continues...)

Excerpted from Selling Outby David Model Lesley Model Copyright © 2010 by David Model & Lesley Model. Excerpted by permission.
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