EUROPEAN PAPERS ON THE NEW WELFARE

Chapter 5: The Club of Rome and the Limits to Growth

3. A Bolt from the Blue
So it was that in 1972, immediately after the publication of the report “to” the Club of Rome on the “limits to growth”, everywhere and at every level there was a thunderbolt in the middle of a clear blue sky. The world was inundated with articles – often written or inspired by economists. Loudly and clearly, they denounced the falsity and deception of the report, even attacking the very idea of a crisis or of a slowdown in growth.
For some economists it was simple, and soon dealt with: as soon as a resource became rare, and therefore more costly, the increase in price would stimulate research which would in turn supply new solutions.
While having my own opinion of the report I was astonished by this unquestioning attitude that appeared to hold that even the most fundamental research was, in a modern society, merely a factor within the economic system. The authors of these articles believed that discovery and invention were merely a matter of short term investment. Apart from some exceptions, there was a belief in a modern form of magic. Why then were electric cars not widespread (they had come before cars with combustion engines) after more than a century of trying to make them so? Or why hadn’t the problem of cancer been resolved?
It seemed clear to me that certain economists excluded the reality and experience of re­­search and technological development from their analysis demonstrating how production (the offering) could be subject to conditions or limitations (rigidity). In this there was a weakness of traditional economic theories, and the harsh attacks by some economists were concentrated on one point: according to them the Club of Rome underrated the infinite, or almost infinite capacity of research. According to me they no longer spoke of research or science but of the myths concerning them.
Let it be understood that it wasn’t a question of rejecting the immense progress made by science and technology in our times, but to me it was disappointing to speak of them as if progress were a supernatural activity divorced from every specific analysis.
The controversy quickly turned to the emotional and ideological aspect. It was excluded that the debate on growth could take place outside traditional economics, partially based on the mythical view of science. More than thirty years later there is still no in depth analysis about the reasons for which in 1972, it was considered normal that growth should stand at 6% and now, after four decades, we are cheered by a growth of 2 or 3% and lament if it gets down to 1% or less. In 1972 there were tears if it fell below 5%, at least in the so-called industrialised countries.
Almost no one noticed that the report projected that the crisis would come about forty years later, i.e. after 2010. Stranger still is the fact that, when Dennis Meadows rewrote the report about ten years ago, reviewing all the figures, he did not find any great changes to be made to the text of thirty years earlier! The updated book passed unobserved. In recent times numerous works have been published in English. Even the English weekly, “The Economist”, (one of the Club of Rome’s main detractors at the time) has analysed the problem of a possible shortage of petrol within ten years. Today, therefore certain hypotheses are more easily accepted, if for no other reason than to stimulate the development of new sources of energy.
The controversy over the Club of Rome report didn’t remain a debate among economists alone. While in the European Community Commission in Brussels Sicco Mansholt took up, and actually broadened the considerations about problems concerning ecology, Raymond Barre and others condemned the report, which by posing the problem of an economic growth reduced to zero risked disturbing social peace. For his part Georges Marchais, Secretary General of the Communist Party, denounced the Club of Rome as a conspiracy of the industrial right to undermine salary negotiations.
The attention on the Club of Rome was immense. The book was translated into about ten languages and over ten million copies of it were sold.
Citations naming the Club of Rome regarding growth, ecology, demographic increase were found even in scholastic text books. It was glorious. Unexpected!
One of the most notable things was the number of fierce articles denouncing what were defined as the Club of Rome’s thesis and, at the same time the fact that in these articles public opinion spotted the positive aspects, in favour of the Club. The message got across in negative form. At the end of the day it was public opinion that adopted this report to express something as yet vague, but that with time would become more precise: ecological concerns, population explosion and its consequences, the opening to a development that today should be “sustainable”, i.e. respectful of resources and the environment.
At that time there were other books and other personalities, such as Ivan Illich, that expressed similar concerns but the Club of Rome had become a legend. Like all legends, it did not completely match the reality, but rather it matched the perception of a large public, of all social classes, political leanings and intellectual levels.
Even in Moscow there was interest in the report: one never knows. Although Georges Marchais was against it, some soviet intellectual thought it was worth seeing from close up if “The limits to growth” might not be the long hoped for sign of a crisis of capitalism. Dennis Meadows and others were invited to some debates in the Soviet capital. After all Aurelio Peccei was always strongly in favour of establishing communications between the East and West. Another of his initiatives, with other members of the Club of Rome, had been to contrib­ute to the founding, in Vienna, of IASA, a centre for scientific studies based on the analysis of systems in social sciences.
I remember a letter of Jan Tinbergen to Moscow in which he rapped them over the knuckles for having tried to find a Marxist-Leninist way to the new “crisis of growth”.  Tinbergen himself – a truly great economist – later presented a report to the Club to underline the fundamental importance of including the question of underdevelopment and poverty in the world among the “problems”.
Much later, at the time of Yeltsin, as a member of the Club of Rome I participated in a meeting in Moscow with some important Russian politicians, including Gorbachev. I made my modest attempt to suggest a knowledge of the new service economy. I have to confess they were not ready to listen to lessons.


4. The myth of zero growth

In any case in 1972 the majority of the members of the Club of Rome had been taken by surprise. Not even Peccei or King had expected such a success. After all they were human beings, happy to be “members” of such a famous Club. Probably a good half of them, or maybe the majority, trembled at the idea of being seen as those who had recommended “zero growth”. The Club repeatedly mitigated this position, putting more emphasis on environ­mental and population problems. The myth however had stuck to the expression “zero growth” and few members resigned because of this label. In fact there was more than one who, having abandoned the Club, boasted, in their elections posters of belonging to it.

***

So the Club of Rome stirred up a furor in 1972, turning the concept of economics and the meaning of growth upside down, and contributing greatly to reawakening an ecological conscience. The father was not completely aware of his gesture, but the baby was there.
The more they insisted on saying and writing that the data in the report were false, the more they ridiculed the research method (even on the occasion of a debate in the CERN auditorium that filled the hall), the more the news spread around the world: there could be gaps between traditional economic growth and the need to develop people’s wellbeing and to fight effectively against poverty.
From these facts I drew a personal conclusion taking account of my experience in industry and in technical-economic research: re-reading the great classics of economics, from Adam Smith to John Stuart Mill, by way of Marshall and Schumpeter, I began to realise that these authors’ best questions, posed in the context of contemporary economics founded on service activity, should find other answers in order to envisage a more efficacious strategy for the development of wealth and wellbeing. I realised, for example, that some of the needs of ecologists, including Ivan Illich, concerned problems already dealt with in the founding texts of classical economics. And yet, for a long time the majority of official economists hadn’t deigned to follow the reasoning of the “greens”: the reasoning of these economists in fact showed, and often still does, that they possess a limited knowledge of the real workings of industry and they misuse recognised economic language, something that allows economics “experts” to turn up their noses at them.
On the other hand, the “greens” on the whole limited themselves to labelling down the economists as being obtuse, and did not take the opportunity to complete or improve eco­nomic theory by extending the notion of value and the wealth of nations. Too often everyone, greens and economists alike, remain comfortably self-satisfied. In any case, public opinion had its little cultural revolution, at least in relation to the evident problem of the growing production of refuse in every possible form, including the most costly and dangerous. Can expenditure on the treatment and management of refuse continue to be counted as an increase in “value added” because it involves turnover and increases the Gross Domestic Product?
This example should not be taken to mean that all economic measures can only be off balance in a negative sense. When economic development produces useful goods and serv­ices at little or no cost (because they induce unpaid activities or services), the measurement of the GDP remains almost untouched, while the real wealth of everyone can be increased. How many discussions would I have had on this point with a member of the Club of Rome who had been director general of the mega French electrical and electronic group, Thomson!
With regard to this great debate on growth, my main stimulus was to observe in detail what was happening within the various economic organisations in which I had carried out my work for a significant number of years. I will return to these questions in a more detailed manner in the chapter devoted to my university activities.

 


Pages: 1 2 3 4 5 6 7