Naked Capitalism Link of the Day

Today's link: Asia Rolling Headlong To Disaster: Consumptionomics: Asia's Role in Reshaping Capitalism and Saving the Planet by Chandran Nair, at Asia Times Online:

To understand Consumptionomics requires a willingness to confront doctrinal purity, the sort of fundamentalism that all ideologies are prone to, and to admit that an idea can offer piercing insight in one way, and yet suffer from anemia in another. For Nair, capitalism's deficiency remains its inability (or perhaps, as some might suggest, its contemporary unwillingness) to acknowledge the natural resource limitations that confront most of the developing world.

This message may fall on deaf ears in the West, and in America especially. The US may be insensitive to Nair's concern over natural resource limitations simply because for so much of its history, the country has rarely had to confront any itself. America's relative lack of population density, its enormous arable land holdings, and its vast natural resources have all combined to make Americans less aware of the reality faced by most of those in Asia.

In many ways, Asia remains the mirror image to America's bounty: where America has vast arable land holdings, Asia faces a chronic inability to grow enough food to feed itself. Where America has - absent pockets in the West - large sources of natural water, Asia confronts a chronic water shortage that has the potential to dislocate tens of millions of people.

Nair is right that Asia may lead the way simply because it has to - but that to do so, Asia must develop a coherent ideology that incorporates these natural resource limitations into policies and practices. As Nair writes, "Growth on the scale envisaged by Asia's development over the next few decades will lead to a loss of natural capital that will dwarf the losses seen in the West during the 20th century, let alone what the world managed in the centuries before that." (pg 90)

Perversely, if Nair is right, it may well be that American business loses out as a consequence of not understanding the enormity of these needs. Asian entrepreneurs see more directly and feel more acutely these problems, and they are likely to advance the solutions more indigenously and rapidly than their Western counterparts.

In his emphasis on society's collective needs over the absolute freedom of the individual, Nair's solution to these problems will deeply trouble many in the West. He asserts three primary realizations that need to be incorporated into traditional capitalism: first, "resources are constrained; economic activity must be subservient to maintaining the vitality of resources", second "resource use must be equitable for current and future generations; collective welfare must take priority over individual rights" and third, "resources must be repriced; productivity efforts should be focused on resources, not people." (pgs 91-92)

This sounds a bit like my opinion that U.S. and European standards of living will decrease as Asian and other developing economies standard-of-living increase.  The main limitation will be resources.  We've seen the stress put on the world economy as food, fuel and metals prices have risen.  We are seeing pressure in the environment.  It will be a strange balancing act, but one we'll have to deal with.  In the end, I think it will come down to how well the global elite handle making large sacrifices, and current indications are that they'll get dragged down kicking and screaming.  We are in interesting times.  I can't see the United States, as currently oriented, handling such a situation well, and as the review points out, this may put us behind the curve in handling resource scarcity.  I think we've built into our culture too many impediments to easily change to a resource-scarce environment.