Capitalism is the key to overcoming poverty and, as a by-product, to controlling population growth. As history confirms, it is not just the best route to rising and sustainable prosperity, it is the only one
“Capitalism combined with sensible controls of social costs is the route to rising and sustainable prosperity. And it is not just the best route; it is the only one. All else will eventually produce impoverishment. Closing up economies by imposing limits on growth or a range of other onerous restrictions will cement patterns of resource usage and lead inevitably to shortages, collapses and chaos; in other words, to entropy. We have stumbled, via Enlightenment thinking and industrialisation, onto an economic system that can overcome shortages by developing new materials and new technologies. There is no conceivable limit. Can this be proved? It can’t be proved. However, so far, history is well onside.”
Living systems maintain a steady state of negentropy [negative entropy].
— James Grier Miller
(The relevance of this quote from the author of the defining treatment of “living systems” will become clear as I argue that capitalism is the only economic system capable of resisting the second law of thermodynamics and sustaining economic prosperity in a finite world.)
Is it possible to have endless economic growth in a finite world? Dick Smith thinks it is absurd, as he explained in August to the National Press Club. He largely blamed economists for propagating and nourishing this self-evident absurdity.
Mr Smith is not alone. Environmentalists would concur, as would a number of other successful business tycoons who have turned to Gaia in their reflective years. The Club of Rome might have over-egged the imminent depletion of key resources in the 1970s but to the faithful it is simply a matter of time. And, really, within fairly expansive limits, wrong timing is a minor fault in the scheme of things.
On its face, the case seems to be unanswerable. If you keep taking bite-size chunks, and increasingly bigger ones at that, out of an apple it will dwindle and vanish or at least only the unappetising core will remain. Liken the Earth to a large apple. Ergo, the enjoyment of the fruits of the Earth is eventually bound to result in a depleted wasteland. Isn’t it? Well, no, actually, it isn’t.
What seems like a no-brainer to environmentalists is a myth—a brainless no-brainer no less. It is as ill-founded as was Malthus’s dismal theory that “population is always pressing against food”. But it has nevertheless flourished in the hands of those who despise capitalism and the economic abundance it brings and who, given half a chance, would put industrial development on hold or into reverse.
From the Keystone Pipeline in the United States to nuclear power in Germany to fracking in Australia, hampering economic development in the name of sustainability is de rigueur. I doubt there is now any major company which does not pay homage to sustainability in its mission statement. Global warming alarmism has added an extra twist but, make no mistake, just as the sustainability movement began before the planet began its recent short period of warming, it will not miss a beat if the planet starts cooling.
To be sure, environmental zealots don’t want to drive us back to the seventh century, as do the clownish Islamists; too many open fires, I suppose. They do however want us in the West to stand still. Mr Smith put it succinctly. If you already have five flat-screen televisions, he said, do you really need seven? I will return to this implied admonishment. It is instructive.