Sustainable Development: Does it require regulation, free-markets, or some balance between both?
(The current, ongoing, global economic crisis offers the basis for this month’s blogspot. As you read through the thoughts shared for this month, try and contemplate an answer to the Sustainable Development-related question that leads us off. Later, at the end of the blog, you are encouraged to share your own answer to this question.)
In the spectrum of ideas, there might be two small points which mark the collective ends of the spectrum, yet there are endless other points of possibility found in between and beyond.
I ask you to consider these topical thoughts of others:
“[F]ree market environmentalists advocate the creation of institutional arrangements that facilitate private solutions to environmental concerns. Markets are not perfect, but they are superior to the regulatory alternative.”(1)
“There is a general consensus that, to overcome this [global economic] crisis, we need a new rules-based strategy,” said Giulio Tremonti, Italy‘s Minister of Finance and the Economy.”(2)
“It is becoming increasingly clear that the [global economic] system is broken,” said Kirby Daley, senior strategist at Newedge Group in Hong Kong. “And there does not seem to be a comprehensive long-term solution being formulated by any country, let alone a coordinated solution to the world’s economic problems.”(3)
Now, using these differing points of view as the starting point for our blog discussion, we initially find one thinker who definitively tells us that free markets are “superior” to regulation, including for the care of Earth’s natural environment.
Yet, in seeming stark contrast, a prominent G8 politician is quoted as definitively saying that human societies now have a “general consensus” that “we need a new rules-based strategy” (i.e require regulation) for our global economic marketplace.
A financial strategist goes so far as to definitively state that the global economic system, governed as it is by freer markets, is “broken”. Thus, he seems to further call in to question the integrity of the first statement and its definitive claim about the superiority of the free market system.
Finally, there is the strong, nearing definitive, statement offered that “there does not seem to be a comprehensive long-term solution being formulated by any country” as this relates to current global economic situation. This statement is given even when, in 1992 at the United Nations Earth Summit held in Rio de Janeiro, Brasil, 176 countries in all agreed that Sustainable Development – with each of its economic, social and environmental components – does provide a long-term strategic solution for all countries on Earth.
So…. what is my intention behind sharing these rather definitive quotes and their contrasting, even conflicting, points of view?
My point is to have us consider “human thinking patterns” and their potential impacts, including on Sustainable Development.
These quotes reveal something I have observed throughout my lifetime in regards to our species: that being, we humans often seem predisposed to definitive statements and rather “simple solutions” to what are otherwise and more often complex challenges.
That is, humans often seem inclined to choose to relate to our world in concrete blocks of black & white perceptions. Otherwise stated, we seem inclined to see our lives as being framed by more limited options, even though we live on a planet that instead supports a rainbow of diverse life forms, reveals near countless ways of being, and offers almost endless possibilities.
Many major world religions call for humans to live “love”, yet this is not what I mean by an example of a “simple solution”. I say this as, in point of fact, for any human being to learn to live unconditional love (to “live acceptance”) amongst all of humanity’s diversity would be, in itself, an obviously complicated process. It would require of us humans that we learn to not “judge” things and instead learn to relate to difference. And learning to relate to difference is not at all easy, especially when we try to do so only through an accepting action such as “love.”
When I speak of “simple solutions”, I refer to those solutions that we humans see as being “simple” for each of us as individuals. And in my own experience, the simple solutions most often sought by people are those that, not coincidentally, seem to agree with our own senses of personality (our own senses of self) as formed within us.
In other words, I have found that people often see “simple solutions” as those that agree with our already existing points of view. “Simple solutions” seem to become simple for people to accept only because they already form a part of a person’s living identity, something which is itself often culturally or religiously determined. (See my January 2009 blogspot, Sustainable Development and the local flavour of ideas and concepts, for more discussion on this last point).
Thus, we human beings easily learn to subjectively judge “things”, and also to subjectively judge other peoples’ “behaviour”, and even to subjectively judge other “life” forms as being either “right” or “wrong”, or “valuable” or “worthless”. Yet what we are really only doing is judging from our own sense of personal identity and personal reality. The “rightness” or “wrongness”, or “valuableness” or “worthlessness” of things becomes, most often, simply subjective.
Unfortunately for us humans, as should by now be more than obvious to us after thousands of years of our species learning to live this experience called life, it is through this process of judging that we human beings actually make our lives more complicated.
And why is this so?
It is because no two human beings are ever completely identical in personality or thought, and certainly no human or other life forms are ever 100% identical in physical appearance. Thus, we humans will always be able to find things to subjectively judge as different, to then next be in a position to further consider these same different things as being either acceptable or unacceptable to us.
Our learning to judge as human beings has, thus, become our “simple solution”, for it is a thing that is so very easy – even seemingly natural – for us to do. And so humanity teaching itself to fully embrace life’s diversity and its many differences (that is, for us to learn to “accept” or “love” all), does in itself become the more difficult path for us human beings to follow, but only because this is really the harder thing for us to do.
Over these past few months since November 2008 and the increasing fallout from the global financial crisis, the global economy often appears to be melting before our eyes.
But how can this be so?
Free marketers have been saying for years that economic regulation was a problem, especially so expressed since the days of former USA President Ronald Reagan and former British Prime Minister Maggie Thatcher. (Remember Thatcher’s expression: TINA? If not, research it for yourself on the Internet). And so in response and over decades, economic regulation has been significantly lessened in countries around Earth, done so to supposedly help better the global economic system.
The ancient Greeks well-knew that when humans are fully left to their own devices, hubris inevitably re-appears to humble us. Today, hubris has re-surfaced in the form of a prevailing human greed in global finance; at least this is so in some prominent Anglo-American countries. And this re-emerged hubris has, as often is the case, been detrimental to the broader “community of life” (or to the detriment of what some people, those with a more narrow view of life, might call the “global economy”).
A seemingly simple economic solution to a complex global reality – that being, more fully free markets – came to reveal its clear drawbacks. And these drawbacks are captured in a recent headline of Barron’s: “Recession? No, It’s a D-process, and It Will Be Long” (with the “D”, unfortunately, standing for “Depression”).
So, if free markets are not the panacea that they were promised to be, is a more fully regulated economy then the solution?
Well, there are also many, even quite recent, examples of the consequences to the global “community of life” from those countries, themselves often classified under the heading of “Communist regimes”, which strongly adhered to a more fully-regulated marketplace (also known as “planned economies”).
Planned-economies provided their own seemingly simple economic solution to a complex global reality. And they, too, eventually revealed their own shortcomings, including their now well-documented societal repression, famine, and also environmental degradation.
The scientific evidence is extensive about the impacts – mostly negative, in my own reading – that aggressive human development patterns (whether those of free-markets or planned-economies) are having on Earth’s natural environment. There are also now a near countless number of studies undertaken that speak to the various, yet often similar, economic inequities that have arisen from these differing economic models.
In my lifetime, humans have seen living examples in various countries of both the pros and cons of the “simple solutions” of either highly regulated or highly unregulated economies.
Simple yet extreme actions in economics have resulted in not-so-simple yet extreme consequences for both human societies and Earth’s biodiversity of life. Do the words “Climate Change” ring any mental bells in this regard?
So where does this take us for Sustainable Development?
Colin Soskolne et al remind us “that the word “economy” derives from the Greek, meaning “managing the home.” And I think humans are now slowly coming to agree that we have not been good managers of our shared Earthly home.
Now underway in Earth’s human societies is what some people refer to as a global “Green Shift.” It is a shift that remains below the radar screen of life for so very many people. But, nonetheless, this Green Shift is revealing itself in many countries. It will one day lead human societies to the new paradigm of sustainable living, one which is necessary for the long-term viability of all life on Earth (or, at the very least, is necessary for human life to continue on this planet).
At its core, the shift human societies are making is toward a balance in life. It entails a change in perspective, one which calls for consideration of all the diversity of life forms on Earth and also for an appreciation for the countless ways of living found throughout this planet.
Related to our economic theme, I share with you below some of the integral elements that this shift would include and do so by also borrowing from one of my favourite recent academic books on Sustainability, Colin L. Soskolne’s SUSTAINING LIFE ON EARTH.
A paradigm shift in human thinking and economics requires us to understand what William E. Rees, one of the co-creators of the Ecological Footprint, says is a natural trait of species:
“…a natural predisposition humans share with all species. Unless constrained by negative feedback… populations tend to expand to fill all suitable habitats and to use all the resources prevailing technology makes available to them.”
This “Green Shift” will apply the Precautionary Principle / Approach, as agreed to by governments at the 1992 Earth Summit, which states that:
“Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation”.
Under a new Green paradigm, the application of this Principle / Approach to economic activities will be essential, especially when we consider that:
“…even if neo-liberals were correct in their view that a pure, “perfectly competitive” market would eventually solve its own problems, such a market does not exist outside of economics textbooks.”
Certainly, these same insights as applied to “neo-liberals” can equally be said for believers in fully planned economies.
And possibly the most important change, the “Green Shift” and its new paradigm will find humans understanding, and our species’ economic models reflecting, that:
“…we must replace the dominant worldview – which dissociates humans from ecosystems – with one that regains awareness of our dependence on the rest of Earth’s complex living systems.”
Shifts to extremes in economic or political models have generally only offered humans simple solutions and their later-related extreme consequences.
Our human minds have near unlimited potential to broadly create and generate ideas, so why should we instead choose to limit our minds and ourselves to narrow, extreme, points of view?
So I leave the final word to you.
Sustainable Development: Does it require regulation, free-markets, or some balance between both?
And then let us know what you think by sharing your thoughts with us.
1. Adler, Jonathan H. (1995). “About Free-Market Environmentalism”, as reproduced with permission from “Ecology, Liberty and Property: A Free-Market Environmental Reader.” The Commons: Markets Protecting The Environment [online]. Available at: http://www.commonsblog.org/about_freemkt.php . [Accessed: 18 February 2009].
2. Reguly, Eric. (2009). In Canada, G20 countries see the future of banking. The Globe and Mail – globeandmail.com, 15 February 2009 [online]. Available at: http://business.theglobeandmail.com/servlet/story/RTGAM.20090215.wrgseven16/BNStory/Business/?cid=al_gam_nletter_newsUp . [Accessed: 15 February 2009].
3. Pylas, Pan. (2009). World stocks down as Dow hovers round November lows. The Associated Press – Yahoo News, 18 February 2009 [online]. Available at: http://ca.news.yahoo.com/s/capress/090218/business/world_markets . [Accessed: 18 February 2009].
4. Ward, Sandra. (2009). Recession? No, It’s a D-process, and It Will Be Long: An Interview With Ray Dalio: This pro sees a long and painful depression. Barron’s – THE WALL STREET JOURNAL. Digital Network, Monday February 9, 2009 [online]. Available at: http://online.barrons.com/article/SB123396545910358867.html . [Accessed: 18 February 2009].
5. Soskolne, Colin L., Louis J. Kotze, Brendan Mackey, and William E. Rees, 2008. Challenging Our Individual and Collective thinking about Sustainability. In Soskolne, Colin L., ed. SUSTAINING LIFE ON EARTH. Plymouth, UK: Lexington Books (Pages 413 – 424, quote on p. 420).
6. Rees, William E., 2008. Toward Sustainability with Justice: Are Human Nature and History on Side? In Soskolne, Colin L., ed. SUSTAINING LIFE ON EARTH. Plymouth, UK: Lexington Books (Pages 81 – 93, quote on p. 85).
7. UNEP – United Nations Environment Programme. (1992). Rio Declaration on Environment and Development [online]. Available at: http://www.unep.org/Documents.multilingual/Default.asp?DocumentID=78&ArticleID=1163 [Accessed: 20 February 209].
8. Westra, Richard, 2008. Market Society and Ecological Integrity: Theory and Practice. In Soskolne, Colin L., ed. SUSTAINING LIFE ON EARTH. Plymouth, UK: Lexington Books (Pages 41 – 50, quote on p. 46).
9. Karr, James R., 2008. Protecting Society from Itself: Reconnecting Ecology and Economy. In Soskolne, Colin L., ed. SUSTAINING LIFE ON EARTH. Plymouth, UK: Lexington Books (Pages 95 – 108, quote on p. 95).