Where Does Boundless Economic Growth Inevitably Lead?

Yesterday I explored the notion of "imperialism," that natural tendency for industrialized nations with mass production that manufactures too much to be absorbed at home and must be sold abroad... by force if necessary (the imperialism part).

OK, so lets take the long view. "Economic Growth" is actually an acceleration; it's not good enough to be stuck at x% growth... the increase needs to be increasing year after year. This raises questions about carrying capacity and the wisdom of an economic framework that demands growth for the sake of "a healthy economy."

This question is explored by William Fort, 80-year-old founder of Praxis, a transnational corporation that is on par with with large nations. Fort is a fictional character, living in 2010, but his insights are pretty real. He knows that the global carrying capacity is finite and he is smart enough to know that economic growth in today's sense isn't sustainable; the economic model must change. The setting is a discussion among a few people chosen by William Fort to think about this issue:

One morning he spend an hour talking about feudalism -- how it was the clearest political expression of primate dominance dynamics, how it had never really gone away, how transnational capitalism was feudalism writ large, how the aristocracy of the world had to figure out how to subsume capitalist growth within the steady-state stability of the feudal model.

One can debate whether or not this question should be left up to the "aristocracy of the world", but the existence of the underlying question is not open to debate.

William Fort eventually reveals his insights on the matter to his select group:

The opportunities for growth are no longer in growth.

Sounds like a puzzle stated by a martial arts instructor or something. Fort continues,

We've got to identify the new nongrowth growth markets, and get into them.

He talks about "nonmarketable capital", which he boils down infrastucture investment, a long-term investment. One of the participants in the discussion observes that such "nonmarketable capital" is publicly owned, to which William Fort responds:

Yes. Which means close cooperation of the governments involved. Praxis's gross annual product is much larger than most countries'. What we need to do is find countries with small GNPs and bad Country Future Indices [bad future prospects]. ... We identify those, go to them and offer them a massive capital investment, plus political advice, security, whatever they need. In return, we take custody of their [nonmarketable captial]. We also have access to their labor. It's an obvious partnership. I think it will be the coming thing.

It's not "coming;" it's already been here. It's "imperialism" writ large. It's privatization. A particularly insidious form is described John Perkins' "Confessions of an Economic Hit Man."

Sources:

Green Mars, by Kim Stanley Robinson.

Capitalism and Why We're Imperialists

The title probably sounds like the ranting of a lefty wing-nut. But a little sober thought reveals a reality that is hard to deny.

Way back in 1902 an English economist, John A. Hobson, provided a simple explanation of the term imperialism, which holds to this day. In simple terms, mass production creates too many products for domestic consumption. This necessitates finding foreign markets, and the capitalists who make the products use the power of their government to secure those markets using military force if necessary. Hobson puts the motivation for new markets this way:

It is open to Imperialists to argue thus: "We must have markets for our growing manufactures, we must have new outlets for the investment of our surplus capital and for the energies of the adventurous surplus of our population: such expansion is a necessity of life to a nation with our great and growing powers of production."

Hobson then puts words to the next logical step: Corporations influencing government's use of the military to secure foreign markets:

After 1870 this manufacturing and trading supremacy was greatly impaired: other nations, especially Germany, the United States, and Belgium, advanced with great rapidity, and while they have not crushed or even stayed the increase of our external trade, their competition made it more and more difficult to dispose of the full surplus of our manufactures at a profit. The encroachments made by these nations upon our old markets, even in our own possessions, made it most urgent that we should take energetic means to secure new markets. These new markets had to lie in hitherto undeveloped countries, chiefly in the tropics, where vast populations lived capable of growing economic needs which our manufacturers and merchants could supply. Our rivals were seizing and annexing territories for similar purposes, and when they had annexed them closed them to our trade. The diplomacy and the arms of Great Britain had to be used in order to compel the owners of the new markets to deal with us: and experience showed that the safest means of securing and developing such markets is by establishing 'protectorates' or by annexation....

What strikes me is that the logic is so simple and it explains the corruption of our government by corporations.

Sources: