ECON: "Unsustainable Predictions"

From: Mark Plus (
Date: Thu Apr 05 2001 - 12:48:54 MDT


Unsustainable Predictions

by William L. Anderson

[Posted April 3, 2001]

While in college during the early 1970s, many of my professors gave me a
large dose of gloom and doom about the future. In a religion class, we read
Robert Heilbroner’s An Inquiry into the Human Prospect, in which the good
professor predicted that the end of industrial society was imminent because
the world was quickly going to run out of resources.

My high school chemistry teacher convinced me to purchase Paul Ehrlich’s
1968 "classic," The Population Bomb, because Ehrlich supposedly had a real
handle on the future, depressing though it might be. (The first line of this
book declared, "The battle to feed humanity is over." Worldwide famine,
Ehrlich declared, had won.)

Of course, I am still waiting for The End—as Heibroner and Ehrlich described
it—to appear. Being wrong, however, apparently has not damaged their
credibility with journalists or economists, given the worshipful tones they
use when speaking their names. Even though our economies—and population—have
continued to grow rapidly since the mid-1970s, predictions continue that The
Last Days are just around the corner, and many people still believe them.

While listening to National Government Radio recently, I heard a cheery spot
about a "sustainable development" program at a nearby college here in South
Carolina. Students and faculty members, it seems, are joining forces to
demonstrate how sustainable development can take place within a "college
community." Of course, the term "sustainable development" carries the
implication that economic development in the real world somehow is not

Heilbroner outlined this way of thinking in Inquiry in 1974:

Ultimately, there is an absolute limit to the ability of the earth to
support or tolerate the process of industrial activity, and there is reason
to believe that we now are moving toward that limit very rapidly.

He then "projected" that if world industrial production were to continue to
grow at its current pace for the next fifty years, it would mean resource
demands of one thousand times what they were in 1974. This is all simple
math, of course, but it paints a very silly picture of how human beings act.
Heilbroner’s predictions are like the scene in the movie Animal House, where
a band marching down an alley into a wall does not turn around, but rather
tries to strut forward as though the wall were not there.

Heilbroner contended that such growth could not be sustained at that level
of resource use, so economic growth inevitably would have to stop very soon
into the future. Although it is unlikely that religion professors are
forcing their hapless students to read Inquiry these days, the Gospel of
Heilbroner and Ehrlich lives on in another movement—the push for sustainable
development. This latest wave of wrongheaded thinking is not just confined
to a small South Carolina college.

The gist of the various sustainable-development moves around the nation,
whether they are part of the overall program of control by the central
government or something heard at the local zoning board, is that the present
trends of economic growth cannot be sustained over time.

For example, during his failed presidential campaign, Al Gore repeatedly
claimed that the U.S. was rapidly losing farmland and that, if that trend
were to continue, we would have to import food and be at the mercy of some
sort of culinary OPEC. Gore was not the first person to sound such alarms
regarding the disappearing farmland phenomenon; it has been part and parcel
of the environmental gospel for many years.

One gets a mental picture reminiscent of the Animal House band: famished
Americans building the last $250,000 house on the last parcel of farmland,
with the buyers occupying their new home just before they die of starvation.
Yet, this is precisely what many Americans seem to believe, and the problem
seems to be getting worse, as more and more local government boards are
inundated with "urban planners" who have been saturated with this stuff
during their undergraduate and graduate studies. Once indoctrinated, these
"planners" then are let loose upon the general public in an effort to
convince us that the only way we can enjoy a decent "quality of life" is for
government to order our every move.

One of the things that seems to be "understood" in this sustainable-growth
movement is that a price system is meaningless. Prices, in the minds of
these planners, are simply arbitrary obstacles to a better life for people.
In reality, of course, the outcomes of policies that ignore the price system
are higher prices and a lower standard of living.

In a free market, prices reflect the demand for a product and its relative
scarcity. As competent economists long have noted, prices determine the
direction of the market, what will be produced, and how much will be
produced. Prices also reflect who is willing to give up the most for these
goods. Eliminate a price system, and it is the economic equivalent of a ship
trying to sail without a rudder. What remains is chaos.

California, for example, has attempted to impose "sustainable development"
in its policies restricting electricity production. When demand soared even
in the face of low production, the California legislature then slapped price
controls on the retail sale of electricity. The logical outcomes of such
actions are apparent even to those with only a cursory knowledge of
economics: Legislatures cannot produce scarce goods like electricity simply
by issuing threats.

A free-market system permits the relative scarcities of goods to be brought
in line with the demand for them. The system deals not only with the present
but also with the future. Without prices, it is inevitable that a good will
be either over- or underutilized. There really is no middle ground.

Given pressure from consumer/voters, for example, the temptation for
government is usually to overutilize a good. That is why people are "loving"
national parks to death and why subsidized sugar farmers in Florida have
been systematically destroying the Everglades. In both cases, the price
system is subordinated to political distribution of goods, and the outcome
is always predictable.

Sustainable-development advocates, however, have also been demanding
deliberate underutilization of goods in order to "preserve" things for the
"future." A case in point is the prospect of drilling for oil in the Arctic
National Wildlife Reserve. Because the U.S. Government owns the land, it is
nearly impossible to make an accurate economic determination of whether or
not oil companies should drill for oil there. Ultimately, the decision to
drill for oil will be decided by whichever group controls the most votes in

Ludwig von Mises understood well the chaos that erupts when government
attempts to take control of those processes that are best left to private
property and markets. Socialism, he said, is a poor substitute for the free
market, and it will quickly break down.

Those who would advocate sustainable development claim that the free market
does not adequately differentiate between present and future needs.
Conversely, those same advocates hold that they possess clairvoyance when it
comes to understanding the future.

That, of course, is nonsense. Those blessed with such omniscience certainly
have demonstrated their keen gifts by taking full financial advantage of
them. Instead, it becomes painfully obvious over time that "sustainable
development" is nothing more than yet another ploy for the blind to control
the lives of those fortunate enough to still have their eyesight.


William Anderson (send him mail) teaches economics at North Greenville
College. See Anderson's outstanding Daily Article Archive .

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