"We need to take the development path"

Herman E Daly asks, "What good is a sawmill without a forest?" That sure is an unconventional question coming from an American economist, who is currently a senior research scholar at the University of Maryland, having served as a senior economist with the World Bank. Daly spoke about his ideas on sustainable development to Sangeeta Agrawal in Washington d c

Published: Wednesday 31 July 1996

On the direction which economic growth is likely to take in the future, considering the fact that reconciling it with environmental protection has been one of the greatest challenges of the latter half of this century:
Unfortunately, the world is still trying to solve its problems by growing more. I think we need to back off and take what I call the development path. Growth is a quantitative increase in material things while development is a qualitative improvement in the way they are used. We need to switch to progress that would be oriented towards qualitative improvement.

On where he sees the US headed:
I am afraid the us is still very much committed to the growth path. We have not yet been able to force ourselves to economise on energy, by passing a simple energy tax. So we have a long way to go. There are some signs that we are beginning to rise to the occasion because the Commission on Sustainable Development has at least advocated the use of taxation to improve the environment and calls for the stabilisation of population. We in the us need to shift specially towards the ethics of self-sufficiency and lowering of consumption.

On whether development without growth is sustainable development:
Sustainable development is qualitative improvement minus the kind of growth that pushes the capacity of the ecosystem beyond its limits.

On where he thinks lies the problem of sustainable development -- with the countries of the South or the North:
I think the real problem lies with the countries of the North. Their model of development has come to mean a continual increase in consumption and economic growth. And the economics faculties of the North's universities are propagating the same model. Students from the South come and learn it and return with the notion that the world is going to grow its way out of poverty and injustice.

But the truth is that in today's world, there is insufficient room for that kind of growth. Further growth will take place at the expense of some vital ecosystems. In that context, I think the major duty of the North is to limit its consumption. The South must take up its population control programmes seriously and the East (formerly communist East) must update its inefficient technology.

On what in his opinion are some major challenges facing developing countries like India, if they are to achieve industrial growth without serious environmental damage:
The answer lies in getting away from the western model of continuous growth and moving towards self-sufficiency and population control. I think population limitation is important for all countries. In many parts of the world, the lower classes generally multiply more rapidly than the upper classes -- the reason being the lack of education. One of the consequences of overpopulation is the abundance of cheap labour. It is hard to raise wages if there is an unlimited supply of cheap labour.

I have always been attracted to Mahatma Gandhi and his ideas on self-sufficiency. He once told a British journalist that "It takes half the world to let Britain maintain its standard of living... how many worlds would it take if India lived at the same standard?"

On whether he agrees with the popular belief that unchecked economic growth and free trade between the rich and poor countries will lift the latter out of poverty:
Free trade is a very dangerous policy in the world today. Back in the 19th century, David Ricardo (a British economist) argued in favour of free trade on the basis of comparative advantage. According to the Ricardian model, capital did not cross international boundaries. What was being traded internationally was national capital cooperating with national labour to produce national goods.

Comparative advantage may have made sense at that time but capital is the most mobile thing today. The result of this has been the hiring of labour that demands the cheapest wage and levies the lowest social cost (and not national labour) by international capital. Also, the goods produced can be sold anywhere in the world.

On what he means by community capitalism and how he thinks it could effect a change in the US:
Community capitalism refers to capital that is rooted in local and national communities and is not globally mobile. It is an utopian suggestion these days. A big change is required for the same but little seems to be happening at the moment. I am hoping for these changes to occur in the us. A few small towns are trying to hang on to their local commerce by discouraging big supermarket chains. But the general push still remains in favour of homogenisation and capital mobility which would keep the bigger chains in.

On whether he ever sees his ideal of steady state economy (one that would remain constant at a level that neither depletes the environment beyond its regenerative capacity, nor pollutes it beyond its absorptive capacity), coming into practice:
I am hopeful of its coming into being. The question now is whether it would come before a big collapse. After the collapse there will have to be reconstruction. And it may be a good idea to present the idea of one (a steady state economy) to people who would have gathered to begin the task of reconstruction. The idea may seem a lot less utopian then.

On whether after years of advocating the case of ecologically sound economics, he finds more and more people understanding the concept, specially those who can effect a change:
I do think there are younger people who are beginning to see things much more clearly, even though it has been a very slow process.

On whether these ideas can reach a wider audience:
I think journalism could help out in such a situation. Journalists need to take on the role of teachers. The task entails reading and understanding scholars and then translating their ideas into a language that is easily comprehensible. It is a crucial link which needs to be strengthened.

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