by Philip B. Smith
Centre for Energy and Environmental Studies
University of Groningen, The Netherlands
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How did the world get to where it is?
We are here to talk about how to create a sustainable world society under conditions of political and economic transformation. Before attempting to provide answers to this question, it is well to take a good look at the historical developments that got us into the situation, call it "mess" if you like, that the world, in particular Russia, is in. In his introduction to this meeting, Joachim Spangenberg has told us about indicators which can tell us whether or not a country is on the road to a sustainable future. These are very important and useful. Especially since Joachim has also introduced social sustainability indicators, and not only physical sustainability indicators in his efforts to decide whether or not a society is approaching or going away from sustainability.
I have great respect for Joachim's pioneering, multi-dimensional approach to sustainability, in which many different dimensions have to be considered if one is to come to grips with what sustainability really means. But my approach is quite different. I talk about politics, and I think that I should explain why. It is because in environmental studies, the condition of the environment is always discussed in terms of numbers. As an ex-physicist I perhaps wish that the essence of the problematique could be captured in numbers. But it can't be. I now believe that no numerical approach, be it one- or multi-dimensional can possibly describe the infinite complexity of the world about us. The problems are political, not numeric. They arise in the hearts of men, and are therefore qualitative, not quantitative.. So do not expect me to present numbers, or forumlas.
To begin with, I want to compare politics with economics. This will, I hope give you a better idea of my general orientation.
The socio-political background
I believe in the primacy of politics over economics. Economic policies, even when pure economic reasons are put forward as the primary objective of the policies, are always based on political motives. And therefore, in my view, to discuss economic decisions without making clear the political motivation behind the decisions, is to close your eyes to the truth. Gunnar Myrdal, when he was only a young PhD, made this very clear[1], despite the disapproval by his colleagues in economics, who would prefer to pretend that economics is, or at least can be, positive science.
I realize that not everyone will agree with this standpoint. Karl Marx believed that all that was necessary to solve all political problems was to reform the economy by transferring the ownership of the means of production, and thus automatically transferring ruling power, to the workers. He thought that this would solve all the problems of the world, so that the governments would finally simply wither away, i.e. that politics would disappear. Thatcher was a kind of inverse Marx. Margaret thought that if you eliminated government first, that would solve all the economic problems; to be sure she had a somewhat different picture in mind than Karl had. Social justice, Karl's ideal, was not exactly what Margaret wanted. I will return at the end of this talk, to the vision of an ideal society. Neither Karl nor Margaret would agree with my conviction that democracy is essential for a future in which mankind lives in peace, sustainability, and freedom. They had in common with each other and, with the "reformers" of the nineties in Russia, that they had no faith in democracy. In fact they either disliked it intensely or else did not consider it worth talking about, for quite different reasons, by the way.
What were the political motives behind the economic advice given by the so-called Chicago school to Russia and other Eastern European countries who, at the end of the 1980s, had turned away from the centrally controlled economic system. The motives were very simple. The end of the Cold War did not end the desire in the centres of power of the West to destroy the colossus, Russia, in the East. Or if they couldn't get rid of it, to render it powerless. This is the fundamental political motive behind the so-called reform of the Russian economy, particularly the shock therapy. Is anyone here really surprised to hear this? Is there anyone here who really thinks that the American economists who gave their advice to Russia had any other goal than to destroy the Russian economy? Come on! It is madness to privatize such an immense economy without first building a well-organized and powerful governmental structure which, at the very least, is capable of:
- (i) enforcing tax laws and collecting taxes so that the state would have the mean to carry out its vital functions;
- (ii) structuring and regulating the market so as to protect the consumer and small businesses.
One would have to be crazy to think that it will help a country to privatize without first building these instrumental structures - essential in every other capitalist country. We return shortly to another, deeper, "requirement" of a successful capitalist economy. I mean a tradition of responsible behaviour.
Although I have never met any of the people who gave advice to Russia, I am sure that I know what their motives were, what their motives had to be. They weren't crazy (I presume) so I am sure that they didn't want to help the country. And all that they needed was to mobilize actors in Russia who were willing to betray their own countrymen. And you may be sure that there are, in any society, people who are quite willing to betray their own countrymen, or for that matter, even sell their own grandmothers, for pieces of silver.
There is one economist who can tell you exactly how it all happened, Joseph Stiglitz. He was, for a time, chief economist at the World Bank. Besides that he was active at the very highest level during the period in which the Russian economy and finally society, were badly damaged on the basis of advice from the World Bank and the IMF So see what he says in answer to the questions: What did the Washington consensus tell the former Communist countries to do, and what were the effects when they did what they were told to do? Here are his answers:
In the early 1990s, there was a debate among economists over shock therapy versus a gradualist strategy for Russia. But Larry Summers (now Secretary of the Treasury, then Deputy Secretary for International Affairs) took control of the economic policy, and there was a lot of discontent with the way he was driving the policy.
The people in Russia who believed in shock therapy were a few people at the top who rammed it down everybody's throat. They viewed the democratic process as a real impediment to reform.
The grand larceny that occurred in Russia, the corruption that resulted in nine or ten people getting enormous wealth, was condoned because it allowed the reelection of Yeltsin.
Both GDP and consumption declined. Living standards collapsed, life spans became shorter, health worsened. Russia "achieved" a huge increase in inequality at the same time it managed to shrink the economy up to a third. Poverty soared to close to 50 percent, from 2 percent in 1989, comparable to Latin America - a remarkable achievement in eight years.
The IMF insisted that both Russia and Brazil maintain their currency at over-valued levels Who are you protecting when you try to maintain that exchange rate by having high interest rates? You're protecting domestic and foreign firms that have gambled on the exchange rate. And who is paying the price? The small businesses that did not gamble and the workers that are going to be put out of jobs.
The lenders in the advanced countries tend to recover most, if not all, of the amounts lent, with the costs of the bailout being largely borne by the workers. There is a large transfer of wealth from the workers to the large international banks and other creditors in the U.S., Germany, and Japan.
Joseph Stiglitz
Please remember that the World Bank and the IMF, we will call them Bretton Woods Institutions (BWI), are meant to be independent organizations. But what does that word independent really mean? It is very probable that because Stiglitz insisted on telling the truth, Secretary of the Treasury Summers demanded that the President of the World Bank, Wolfenson, fire Stiglitz. Wolfenson is very intelligent and honest and agreed with Stiglitz on all substantive issues, but it appears that Summers threatened Wolfenson with losing his own job if he didn't obey and fire Stiglitz. And now the important question: how could Summers, a mere cabinet member of one of the hundred and so many countries making up the World Bank, force the president of an independent institution to do anything? Good question!! Does anyone have the answer?
None of the statements of Joseph Stiglitz are a surprise to anyone here. I am quite sure that if they look like bad dreams to me they must be a nightmare for a Russian, unless it happens to be one of Russians who became immensely rich robbing his own countrymen.
But the consequences of the BWI measure are not only nightmares for Russians, but also for anyone who wants a sustainable future. I will return to this shortly under the heading of Globalization, a deadly enemy of sustainability. But first I will speak of one more condition which must be satisfied before a capitalist economy can function "to everyone's advantage", as Adam Smith believed that it could; another condition not taken into consideration by the Chicago school when prescribing the Shock Therapy.
The factor of responsible behaviour
Besides the indispensable instrumental mechanisms, already mentioned, needed to make capitalism "work", there is another essential element that cannot be created by law, but only by time and patience. What I have to say about this will not be understood by an economist of the Chicago school, such as Milton Friedman. When they teach economy they leave out of their teaching the most basic of all of the necessary conditions for successful capitalism. Friedman has probably never read anything that Adam Smith, the father of capitalist philosophy, wrote. I am referring to a sense of responsibility, honesty. It is simply a lie to say that Adam Smith considered pure selfishness as a condition for the successful working of the market. He assumed that the market was embedded in a society in which decent human behaviour was the rule.
Economic theory, as it has been passed on to us by Friedman and his sort, is a thin, distorted, version of Smith's original thoughts. Self-interest works only if it is softened by a tradition in which humanity, generosity, and public spirit are essential elements. Keeping to the rules governing contracts is essential. And not only written contracts, but also verbal statements - such as "I will pay you on the fifteenth of the month". Naturally there are many cases in daily practice where these rules are not observed. That is why we have courts of law. But, in general, contracts are obeyed in working capitalism. Most people pay their taxes. Most businessmen pay their debts. To develop this tradition in a society such as Russia takes time and patience, because up until 1990 the state took care of all the questions of responsibility. I don't want to discuss whether the state did that well or badly. All that is important is that this essential element was left out of the Shock Therapy.
Please do not misunderstand me. I am not saying that the Russian people are not an honest people. I would say the opposite –all over the world, most people are honest, most people respect their responsibilities with respect to others, to society as a whole. Dishonesty is concentrated to a high degree among those whom Machiavelli called i grandi, the powerful. But the Shock Therapy put power, quite deliberately by the way, in the hands of those with neither honesty nor a sense of responsibility.
What I am trying to get across is that I believe that a carefully regulated capitalist system could in principle be sustainable. But the conditions under which this can happen are, besides the simple instrumental conditions already mentioned, a sense of responsibility. This would certainly include a feeling of responsibility to our children and our children's children, to the seventh generation, but also to the rest of life on this earth. The idea of internalizing environmental costs does not appear strange, or "uneconomic" to one who feels responsible for what happens after he is dead. Looking at the minimum conditions I have mentioned above is clear that in Russia, and not only in Russia, these conditions are not satisfied. And to make matters worse, the direction that the economy of the world has been going in the last twenty years is taking us even farther from a sustainable future.
It is a sad picture that I have had to paint. I wish that what I have already said was the only unpleasant thing to say. But it is not the whole picture - the whole picture is even worse. To get the whole picture one must also look at the international dimensions. One of these is the military dimension, another is globalization. And finally, as if what I have said is not enough, there is the universal belief that we must keep on producing more and more, to infinity. This will mean in the end, even if we solve all kinds of technical problems, that sustainability is a dream which will never come true.
The military background
There are, of course, more ways to achieve the political goals of diminishing the power and status of a country than to destroy its economy. In Dr. Zverev's paper, Geopolitical Stability and Civil Society as a Condition of Sustainable Development of the Kaliningrad region of the Russian Federation, we read that, according to American military strategists, one motive behind the intended expansion of the NATO to Lithuania is to isolate Kaliningrad by essentially surrounding it with NATO territory. Its liquidation would then be easy. Again I ask if there is anyone here who was really surprised to hear that?
It would be senseless to go on talking about the problems of sustainability while forgetting that NATO (which is just a shortened way of saying The United States of America) is intensifying its aggressive policy, now by territorial expansion, towards the East. I have already mentioned the way of thinking, the desire to destroy Russia, behind this. Fascinating is that 150 years ago Alexis de Toqueville, with his incredible capacity to predict future developments, foresaw the power struggle between Russia and the United States. And although in the seventy years following the October revolution the official enemy of the United States was the Soviet Union, the real enemy was Russia, as it still is today[2].
We may assume that the consequences of the NATO expansion will not lead to a shooting war, soon. But the consequences of the expansion of NATO for future sustainability are nonetheless disastrous. The production of weapons is one of the most obvious obstacles to achieving sustainability. I don't think that in this meeting I need to explain why. I also think that it is too bad that environmental scientists usually ignore weapons. Weapons are one of the largest sources of deadly pollution in the world, and most certainly one of the most wasteful uses of resources that one can imagine. But, going back to politics; in the minds of Realpolitikers the world consists of various enemies and groups of enemies who forever and forever will always try to destroy each other. They, the Realpolitikers are, therefore, always much in favour of weapons.
But while it is the Realpolikers who provide the theoretical background, it is the more practical people, the weapons manufacturers, particularly in the United States, who are responsible for the expansion of NATO. They smell profits. Naïve people think that the U.S. is making a big mistake by provoking Russia through the aggression against Yugoslavia and the expansion of NATO. But in the eyes of the armaments people this is no mistake at all. The motive is exactly to provoke Russia. If Russia could really be provoked, it would provide an argument for an even bigger build-up of new NATO weapons, thus an even greater increase in profits. As you may know, the weapons manufacturers in the United States have spent untold millions on propaganda praising the expansion of NATO. They have a tremendously rich lobby in congress which, before the decision was taken to expand NATO, bombarded congressmen continually with arguments for expansion (particularly those congressmen who had armament industries in their own states).
I think that I have said enough on the subject of weapons and military threats. It should be clear now that while we are sitting here talking about achieving sustainability through economic and social measures intended to reduce the waste in our production systems, while maintaining social stability, things are happening in this world which make our discussions rather pointless.
Globalization
In the INES Newsletter I published an article (June 1998) about what it has meant to Costa Rica to follow the advice of the BWI. The conclusion was that the road to a sustainable future for that country was effectively blocked, probably forever, by the measures forced on the country by the BWI. This is doubly tragic because in the community of nations Costa Rica was a pioneer in sustainable policies until the BWI got the country in its grip. And much closer to home for Europeans, in Bulgaria, the measures forced on the country by the BWI included the destruction of one of the best functioning public health services in the world, and, deliberately, forcing the country to abandon a fine system of public education. Now only the rich can afford to have good health service or to give their children an education. And even closer to home is the way the economy in the Ukraine has been willfully destroyed by the BWI intervention. There are many publications telling the same story about many countries. We are here to discuss sustainability, and what is important about globalization is that, apart from the human tragedies, it is destroying all hope for a sustainable future.
The policies responsible for this destruction did not come into existence by chance. Free trade, free capital movement, elimination of any and all barriers to trade, even those barriers that are essential for the prevention of irreversible environmental destruction. These are the policies of the WTO and the BWI. We are told that these policies make for a level playing field, an economic system in which everyone has an equal chance to win. But is that fair? A Dutch political cartoonist, Nico Visscher, gave his version of how fair it is, or rather how unfair it really is.
In a free market system of trade the strongest always wins. It is a system that is based on strength, not fairness. That is why economically powerful countries are always in favour of the free market. You don't have to be a radical to see that the protests against these policies are reasonable. Even such a well-known economist, as Joseph Stiglitz, who is not a radical at all, just an honest man, has stated that he considers that the protests against the WTO meetings are an effective way to get across the sense of values and the concerns that a lot of young people, and people generally, have. These values go beyond narrow materialistic issues. They are concerned with poor people and democratic participation, and about governance issues and about the environment. In a world dominated by giant corporations it is good to see that there are people who have other values.
The other values, values that do not exist in the world of neo-liberal economics, are based on all of the things that make life worth living. I am talking about human warmth, I am talking about compassion, I am talking about helping your neighbour and sharing what you have with others. Life without these things would not be liveable, and the protests against the WTO had to do with these values. And you may be sure that in the minds of those men, and they are men, not women, who decide upon the policies of the WTO these real values do not exist.
Let me give you an example. The Shock Therapy for Russia was pushed through by Larry Summers, as Joseph Stiglitz has said. Larry Summers is enthusiastic about freeing up trade because it creates in his eyes, a level playing field, as powerfully pictured in the cartoon above, the level playing field of Larry Summers is very unfair. But that is not all you have to say about him. Do you know that he once stated that Africa is severely underpolluted? His argument to prove this is that the value of a human life is equal to how many dollars a person could earn during his life if he doesn't die too young. That is what human life means to him. If that is what you consider the value of human life, it is quite logical to send all of the poisonous by-products of production in the industrialized countries to Africa. When an African dies from the resulting pollution, the loss is much less than if an inhabitant of an industrialized country were to die. The person behind this kind of thinking, Larry Summers, is now as Secretary of the Treasury of the United States, probably the most powerful man on this planet. And that makes it look very bad for sustainability.
If the world manages to conquer all of the obstacles that I have spoken of, including Larry Summers, there is still one more. And that is one that is very deep in modern industrial society, independent of the particular economic or political structure of the country involved.
Our heritage: the Conquest of Nature
The choice of the way in which production is to be carried out, and who it is who decides how much of what products should be produced, are questions which, during the better part of a century, divided the world. In fact, almost destroyed the world in a nuclear war. But capitalists, socialists, communists all agreed that the main goal of an economy is to produce as much as possible, as fast as possible, keep the rate of production always growing, and above all, forget what the consequences are for the future. This is an old idea, and in the many places on earth where production falls short of what is really needed by people it is not a bad idea at all. It is quite necessary. But the trouble is that in those parts of the world, the enormously poor parts of the world, the universal dream is to imitate those countries where production has already passed the point of usefulness and has reached the stage of pointless destruction of the ecosystem.
One of the intellectual giants of our age, John Kenneth Galbraith[3], puts it this way:
To furnish a barren room is one thing. To continue to crowd in furniture until the foundation buckles is quite another. To have failed to solve the problem of producing goods would have been to continue man in his oldest and most grievous misfortune. But to fail to see that we have solved it, and to fail to proceed thence to the next tasks, would be fully as tragic.
I want to say a few words about this strange compulsion to produce.
Our compulsion: the Endless Growth of Production
There are, of course, reasons for the compulsion to produce. Nothing could occupy such a central position in all economic thinking unless there are a reasons for it. But in an advanced industrial society we have no way of saying: "This is enough." Once production reaches the point where large investment is needed to produce goods, you come up against a very serious difficulty. And that is: what do you do when everyone has enough of some particular good that is made in a factory? Put the workers onto the street and destroy the factory? Of course not!
Another difficulty is that the financial system of the capitalist world is constructed to support and make possible continuous growth of production. One essential element which I should mention is the custom of applying compound interest interest on interest. One should read what the Nobel Prize winning chemist, Soddy wrote about this, eighty years ago[4]. This custom of paying compound interest creates the illusion that wealth, once created, keeps growing forever. This illusion arises from a misconception concerning the nature of wealth, namely the idea that wealth is a fixed thing. But wealth is not a fixed thing, it is a flow. A flow the source of which is nature, in the end the energy arriving here from the sun. All wealth derives from that energy. I am not underrating the part that human intervention must also play. But without the original source of energy, there would be no wealth production, with or without human beings. And the fiction of compound interest can, of course, not increase this flow. But what it does do, is to divert a steadily increasing amount of the flow of real wealth away from those who create it, the workers, to the investors.
But, as I said, the application of compound interest creates the illusion that wealth is something that can grow by itself. The terrible thing about this illusion is that the whole financial system of the world depends upon it; in fact it would collapse if production were to stop growing. And who decides if production should keep growing? The same financial institutions, of course. So the very real problem of how to stop endless growth is made practically impossible because those in a position to stop it when enough has been reached, do not wish to stop it. And economic theory is attuned to, in fact in the service of, those who are in a position to decide, the powerful. The thought that production obviously cannot keep growing forever, a simple truth that a child can understand, has never entered the brains of economists.
The solution is simple if you consider it to be a physical problem, but much more difficult if you realize that the most important part of the problem is political. The economic historian Rostow described the conditions[5] necessary for what he calls the "take-off", that is the beginning of industrial growth in a country. He doesn't describe the "landing", i.e. the transition to a non-growth production system. Nobody ever has, although John Stuart Mill did believe that a steady-state condition was achievable.
I don't know how to approach this problem except through wide participation of an informed public in the decision of how much a given good to produce, and when to reduce the production to the level of replacement of obsolete or worn-out examples. It is obvious that a democratic society is a necessary condition for such a new idea to even be conceivable, to not even talk about how to make it practical. However, I doubt that in today's world that such an informed public, even if it were to exist, would choose to stop the growth of production. We must never forget that behind the push toward an endless growth of production there is the tradition that man's task is to conquer nature for his own good.
It has not always been like that throughout man's history. The belief that man's task is to live in harmony with nature, is a belief that apparently all "primitive" civilizations, but also many highly developed civilizations, such as the ancient Sri Lanka, shared for millennia. This belief was thrown overboard when fossil fuels seemed to offer the possibility of conquering nature for our own use, and at the same time in which the modern exact sciences made such tremendous progress toward understanding the world about us. This seems to have brought about a fundamental change in the way man considered nature. It appears to have given rise to the conviction that man does not need nature any more. This point of view is strongly defended by Vice-President C.G. Weeramantry of the International Court of Justice in a separate opinion concerning the famous "Danube Case" between Hungary and Slovakia[6].
Exactly when and why the concept of harmony with nature was abandoned by the industrializing countries is unimportant here. The fact is that we have inherited the belief that we must conquer nature, not live in peace with nature. And my idea of appealing to an informed public would, I fear, not lead to stopping or even slowing down of the growth of production. As I mentioned above the tradition of endlessly growing production is equally strong in all economic thought, and as I said, even a child can see that it is incompatible with sustainability.
You are probably asking yourself whether or not I believe that there is any hope, with or without economic transition, of ever achieving a sustainable world society. Is there any hope? I don't know the answer, but I do know that there is a necessary condition for this. It is not a sufficient condition, so it doesn't give any guarantees, but I would like to conclude this talk by explaining why a democratic system of government is necessary if mankind is to achieve a socially and physically sustainable world community.
The (possible) role of democracy
I take, in the following, some of the ideas of Amartya Sen (Nobel Prize winner in economy) published last year[7]. Sen's main thesis is that development, far from being exclusively an economic affair, is a process in which the freedoms which a person has are expanded. One of these freedoms is, of course, freedom from hunger, and it would be absurd to declare that economic growth is irrelevant to the elimination of hunger. But there is much more than that to it; for example, economic growth and hunger can exist side-by-side; in fact, growth can even make hunger worse. But expanded freedom will not tolerate hunger. Sen points out that while history is full of terrible famines, there has never been a famine in a democracy. The history of India under British rule is one of recurring famines. One of most terrible famines in history took place in 1943, just before independence. Since the independence of India in 1947 there has never been a famine there, despite the occurrence of bad harvests. Anyone would have to admit that that is impressive. But that is only one of the many important reasons why democracy is essential for a sustainable and liveable world.
In particular it is important in providing the space, the conditions, for solving conflicts in society. And there is one conflict which has always existed and will always exist. That is the conflict between the powerful and the people. Karl Marx was convinced that once the correct conditions of control of the means of production were established, this conflict would disappear. Did it in the Soviet Union? Not at all. Just a different group of people became the powerful. And the methods used by the "new" powerful to handle the inevitable conflicts were as inhuman as any in history.
In paragraph IX of The Prince, Machiavelli states that in every city (i.e., society) there are two "dispositions", the people and the powerful[8] and "the people are everywhere anxious to not be dominated or oppressed by the powerful, and the powerful are out to dominate and oppress the people." His own "choice" comes out clearly a few lines further where he writes, "The people are more honest in their intentions than the powerful because the latter want to oppress the people, whereas the people want only to not be oppressed."[9]. The French political philosopher Claude Lefort[10] calls this conflict "indissoluble". This simply means that it will always exist and never be "decided" in favour of one or the other. This point of view has considerable historic support. He claims that only in a democracy is there a possibility of treating this conflict in a fair way. In other words, as long as there is democracy it provides a "platform" where the conflict can be fought out fairly. This is not the place to go into his excellent arguments, but what it comes down to in the end is that in a democracy the "seat" of power is empty. It is filled temporarily by one group or another. There is thus no final, all powerful source of power, who simply decides, perhaps quite arbitrarily, the outcome of the conflict. That is why democracy is so fragile, so vulnerable, because there are always powerful people who are sure that if they take power and kill democracy, the country will be much better off. I think that Lefort's arguments are very convincing.
This is very important for the chance of reaching a sustainable world. It is, in the end, the people who pay the price of an unsustainable world. Today over the whole world, except for the highly industrialized parts, the people are being crushed be the giant corporations, the powerful of Machiavelli in the modern world. There are, unfortunately, many ways to kill democracy and the multinationals, now in possession not only of the means of production, but also of almost all of the media, are proceeding rapidly to do just that. According to Lefort, the only hope that the people have of winning, even temporarily, is under a democratic system of government. This will not "solve" the "indissoluble" conflict. But it does give the people the possibility of winning battles. It also requires the people to be constantly aware of the dangers that always threaten freedom.
If Lefort is right, then the necessary condition for the solution of the problem of sustainability in Russia, or anywhere else, is a democratic system of government. This is not sufficient, but necessary. And to make it worse, what Lefort does not say is that democracy exists in many degrees. I just mentioned the control of the media by the powerful. In the United States, this process has gone so far that it is almost a joke to refer to the "American Democracy." Democracy can only be a success if the citizens are well-informed. You have to know the truth, in order to judge correctly.
I regret that I have not been able to offer you any solutions. Only a broad picture of the reasons why achieving sustainability will be harder for the recently "economically transformed" states, such as Russia, to ever achieve sustainability, than it will be for the other industrial countries. And as we all know, it is very doubtful if any of these countries will ever get on the road to sustainability.
The role of the universities
I have left to the end a discussion of the role of the universities. I think that from what I have said, it is clear what has to be done: train another kind of economist. Train economists who are taught that nature and man have to exist together on this earth. Train economists who consider themselves servants of the people and not of the powerful. Train economists who know that money is not the only thing in life. Then you will stop creating a new generation of Larry Summers. Economy is not a positive science, it is a human science. You will have to have a new program in order to teach that. But you need new people too. Larry Summers only says what he was taught by his professors of economy. Make sure you appoint professors with a different view of economy. At the very least they should be part of the movement called Ecological Economics[11]. There is a rich literature[12] on the subject, so don't say that there are no guide lines. Have the courage to admit that what is called economic science has been creating malformed human beings and calling them economists. If you do that, the following generation will have a chance to achieve a sustainable world society.
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[1] See his excellent exposition The Political Element in the Development of Economic Theory, originally published in Swedish in 1930, and not translated into English from the German version until 1954 by Paul Streeten; New Brunswick, (N.J., U.S.A.): Transaction Publishers, 1990. Amusing is that Myrdal never gave up hoping that economics could become positive science.
[2] This wasn't the only thing that de Tocqueville foresaw that has a direct bearing on sustainability. He also predicted, among other things, the appearance of consumerism, another deadly obstacle to a sustainable future.
[3] John Kenneth Galbraith, The Affluent Society; page 260, New York: Houghton Mifflin Company, 1998.
[4] Frederick Soddy, Cartesian Economics: The Bearing of Physical Science upon State Stewardship. Two lectures to the Students of Birkbeck College and the London School of Economics, 1921.
[5] W.W. Rostow, The Stages of Economic Growth, Cambridge: Press Syndicate of the University of Cambridge, 1990.
[6] This separate opinion, dated 25 September 1997, can be downloaded from the Internet at the address:
http://www.icjcij.org/icjwww/idocket/ihs/ihsjudgement/ihs_ijudgment_970925_frame.htm
[7] Amartya Sen, Development as Freedom, New York: Alfred A. Knopf, 1999.
[8] In the translation of George Bull (Harmondsworth: Penguin books, 1961,1975) this division is described as "the people and the nobles". In the original, Machiavelli uses i grandi, which I believe is better translated as the powerful, referring in a democratic society to financial power, i.e. wealth, since in modern society it is wealth, not "high" birth, that bestows power on the possessor.
[9] As an aside, we suggest that Machiavelli's sympathy for the people is the reason why he was so strongly condemned by so-called moralists. The main ideas of his astute recommendations to rulers about how to manage their countries are followed right up to today by all Realpolitikers. Note added in revision: Joachim Spangenberg suggests that the English moralists were angry at his rather cynical advice to rulers because the English, in building their empire, followed Machiavelli's prescriptions accurately.
[10] See, for example, Claude Lefort, Democracy and Political Theory, Minneapolis: University of Minnesota Press, 1988. The essays in this volume were first collected in Essais sur le politique (XIXe -XXe siècles), Paris: Seuil, 1986. The excellent translation was the work of David Macey.
[11] The International Society for Ecological Economics (ISEE), Chairman, Richard Norgaard. The ISEE publishes (via Elsevier Scince, B.V., Amsterdam) the journal Ecological Economics, Editor-in-Chief, Robert Constanza, University of Maryland, Solomons MD, 20688-0038, U.S.A.
[12] To begin with, of course, H.E. Daly and John B. Cobb Jr. For the Common Good, Boston: The Beacon Press, 1990. I recommend highly three books by Mark A. Lutz which contain the essence of social, or humanistic economics. They are: The Challenge of Humanistic Economics, (with Kenneth Lux) Menlo Park, CA.: Benjamin/Cummings Publishing Co., 1979, Humanistic Economics: The New Challenge (with Kenneth Lux), New York: The Bootstrap Press, 1988 and Economics for the Common Good, London: Routledge, 1999.
