The rationale behind the current model of global development was first advanced by U.S. President Harry Truman in his inauguration speech before Congress in 1949. In his address, Truman spoke emphatically about the deplorable conditions of the poorer countries. He defined them for the first time as “underdeveloped areas.” In one grand, rhetorical sweep, Truman had created a concept that soon would divide a diverse world into three neat categories–developed, underdeveloped, and undeveloped nations. According to this new vision, all the people of the world were climbing up the same economic ladder, some slow, some faster, but all toward the same material goal. On top of this ladder were the Northern countries, most particularly the United States, and at the bottom were the countries of the South, with their hopelessly low Gross National Products (GNP).
The Failure of Economism
The worldview that Truman so successfully articulated has been termed economism by the German author and green activist Wolfgang Sachs. According to this worldview, a country’s level of civilization is based on its ability to produce material goods–that is, to increase its GNP. To the society’s in the South, who had, for centuries, advanced a more or less sustainable agricultural economy and advanced some of the world’s most sophisticated cultures, this model appeared to have little meaning. Yet, according to the Truman doctrine, these Southern countries were from now on to be recognized as poor, struggling nations, whose main goal was to copy the North by climbing to the top of the ladder of material progress.
Thus economic values superseded all other societal values. According to Sachs, a society no longer had an economy, society simply was the economy. However, this materialistic and one-dimensional ethos was not always embraced by the countries of the South. For them, society included a tapestry of functions, ideals, modes of knowing and cultural legacies that were often diametrically opposed to a society driven by the streamlined dictates of maximum economic output.
Consequently, over the past 40 years, the North’s development strategies have caused tremendous cultural upheaval. Thousands of local or indigenous subsistence cultures have been decimated during the forced process of joining the global race toward economism. However, the gap between the so-called underdeveloped and developed countries has not been closed. To the contrary, it has widened. In the process, millions of people have become uprooted from their local environment to join the poor day laborers or unemployed struggling to eke out a living in dilapidated and burgeoning shanty-towns from Mexico City to Calcutta. In short, modern development practices have been, for the most part, detrimental to both local economies and local cultures.
Economic Development and the Destruction of the Environment
The myth that the global economy can continue along the path it has been following since Truman’s speech in 1949 stems in part from the narrow worldview of economism. According to the business weeklies and forecasts by economists, the world’s economy is relatively healthy and long term economic growth prospects are promising. That is, relatively healthy for those countries with an advanced industrial or post-industrial economy, fueled, in part, by cheap labor and raw materials from the South. In Africa and Asia, for example, the economic prospects for most people are not promising. But more to the point, when it comes to relate economic demand levels to the health of the natural world, economic planners are at a loss. In fact, economic planning, guided as it is by economic indicators and basing its future predictions on past performances, have worried little about its impact or relation to the environment. Economism, in other words, often do not see the intricate relationship between economic output and its effect on the global ecosystem. This shortsightedness has had disastrous environmental consequences with often equally calamitous consequences to people, their culture and livelihood.
Five Reasons Why Development Has Not Eradicated Poverty
The dominant neo-liberal development model has also failed to deliver its promise of eradicating poverty in the world. Here is a summary of the the five main reasons:
1. It has failed to bring economic equity. Economists Herman Daly and John Cobb maintain that development itself contributes directly to the growth of global poverty: “On the whole,…development policies in the Third world have made many landless, filled the vast slums surrounding Third World cities, and added to the problem of hunger.”
2. It has failed to integrate economic and ecological concerns. Too often we are consuming and destroying our biosystems instead of living in harmony with them. More to the point, the materially rich Northern countries extract natural resources from the biologically rich Southern hemisphere, thereby causing both economic and environmental breakdown in the so-called Third World.
3. It has failed to protect local cultures and communities. Multinational companies generally do not ask the local people for permission to profit from its extraction of resources from an area. A typical example is the Choco region of Ecuador were oil and other natural resource companies have built a destructive network of roads, colonized and destroyed half of the country’s rainforest, and devastated the lives of thousands of native peoples.
4. It has failed to establish a global, human security policy, to bring about human rights, peace and justice. According to Michael Renner of the Worldwatch Institute: “A human security policy [must] include…redistribution of wealth, debt relief, job creation, technology development , more democratic and accountable governance, and the strengthening of civil society.”
5. It has failed to provide depth of meaning. Official development policies has expanded the money economy ever more deeply into every sphere of human life. The increasing hunger for more material goods and profits has created a world of inequity, but also an impoverished global culture lacking in deep, human and spiritual values.
Toward Sustainable Economics
The most basic tenets of free market capitalism or economic liberalism, which is the predominant economic model today, can, according to author David C. Korten, be described as follows:
- Sustained economic growth, measured by Gross National Product, is the foundation of human progress and essential to alleviate poverty
- Free markets are the most efficient and socially optimal way to allocate resources
- Economic globalization–the free flow of goods, irrespective of national borders, in an increasingly integrated world market–is beneficial for all
- Local economies should abandon goals of self-sufficiency and instead attract outside investors in order to become internationally competitive
“These tenets,” according to Korten, “have become so deeply embedded within our institutions and popular culture that they are accepted by most people without question… To question them openly has become virtual heresy and invokes the risk of professional censure and career damage in most institutions of business, government, and academia.”
Moreover, the philosophical underpinnings upon which economic liberalism rests are rarely questioned. Briefly, according to Korten, these are: 1) humans are motivated by self-interest; 2) the action that yields the most profit is the most beneficial to individual and society; 3) competition is more beneficial than cooperation; 4) human progress is best measured in consumption, i.e…. those who consume the most contribute more to progress.
“The moral perversity of economic liberalism,” according to Korten, “is perhaps most evident in what it views as economic success in a world in which more than a billion people live in absolute deprivation, go to bed hungry each night, and live without the minimum of adequate shelter and clothing.” This moral perversity is even more appalling in light of the mounting evidence that the recent years increase in poverty and deprivation is a direct result of economic liberalism’s monopolistic domination of the Third World.
The Need For New Models of Development
Central to the question of how to eradicate poverty is the question of which type of development is best suited for the task. According to the dominant model of development that arose during the post-War era, economic growth is seen as the best way to eradicate poverty. Furthermore, economic growth is best promoted by privatizing community assets, deregulating markets, removing barriers to free-trade and investment, and protecting intellectual property rights. However, this model, as promoted by the so-called developed nations, has so far failed to eradicate economic inequality, human oppression, environmental imbalance, and the destruction of local cultures. In other words, development has failed to curb the underlying causes of global poverty. Consequently, new development models have arisen as alternatives to the dominant model. These new models are often referred to as “sustainable development.”
The sustainable development paradigm was first defined by the UN’s Brundtland report as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” Development is defined as “a progressive transformation of economy and society.” Said another way, sustainable development involves balancing the environmental demands of human economic activities with the regenerative capacity of earth’s eco-systems. While sustainable development calls for substantial reforms in the functioning of the global economy, it does so–in most of its variants–within the context of the neo-liberal, free-market economy dominated by transnational corporations, the IMF and the World Bank.
Alternative Development Models
These development models–which also are referred to as sustainable–call into question some of the core institutions and ideological foundations of the world economy, such as growth, centralized economies, unprotected local markets, private domination of resources, and material increase as the sole measure of progress.
Post-development–holds the view that development theory is riddled with the fundamentally flawed assumptions of Western, industrialized civilization. The discourse of development theory must be abandoned, and new models must be formulated, informed by the traditions of indigenous peoples, spiritual values, and authentic regional cultures. Post-development supports the critique that, as expressed by Vandana Shiva, “development devalued people by declaring them underdeveloped.” Thus, development promotes a perception of “the Other,”–in this case, the global poor–instead of asserting humanity’s inherent unity.
Sustainable society–holds the view that sustainable development as held by the Brundtland Report is inherently unsustainable, as it calls for dramatic growth in the world economy in order to eliminate poverty. Gowth on such a scale, according to founders Justin Lowe and David Brower of Earth Island Institute, would be “attainable only with cataclysmic costs to the Earth and the future.”
Grass-roots development--a term coined by the New Internationalist magazine to signify a decentralist approach to sustainable development in which individuals and local communities take increasing control over their economic and social destinies, with a corresponding elimination of the influence of big business and, for the most part, big governments. This view has close affinities with the agenda of the bio-regionalists, who would add the need for local control over culture as well.
People-centered development–popularized by David C. Korten of the People-Centered Development Forum. Attempts to advance the emergence of “an awakening civil society,” particularly as it is seeking expression by progressive citizens organizations. Suggests that truly sustainable development can only occur where culture and the institutions of civil
society are strong, local communities exercise economic self-determination, ecological systems remain vital, and societies are just and economies equitable.
Natural Capitalism–proposed by Paul Hawken. Advocates socially responsible business practices in order to reverse global environmental and social degradation. This “double bottom line approach” to economics holds that commercial activity should generate both financial and social dividends. Economic reform will occur by holding corporations responsible for their actions through green taxes and external cost accountability. The task of this “capitalism with a green face” is to create new industrial and market designs that are “self-actuating as opposed to regulated or morally mandated.”
Balanced Development–proposed by social theorist Sohail Inayatullah, and others, attempts to move away from the language of development theory by using the ideas of P. R. Sarkar and his PROUT theory (Progressive Utilization Theory). PROUT calls for a dynamically balanced use of physical, mental and spiritual resources for the development of individual and society, and within the context of a strong ecological ethic. Development is not only balanced and dynamic, but it is progressive; progress being conceptualized as movement toward spiritual enlightenment. Central to PROUT’s vision of a more balanced society are decentralized economics, economic democracy, cooperative enterprises, self-sufficiency, and both a minimum and maximum income.
Emerging from these alternative models of development is the need for a comprehensive theory of development, one which must address, in integrated fashion, economy, ecology, society, and spirituality. To establish this new concept of development in practice, however, will require a fifth element–the political. All these five elements are today to be found in the dialog on sustainability and development. But how can they be brought together in an integral fashion? Through the large scale integration of political action with the creation of model community-based socio-economic development projects. These locally-based, small scale model development projects can spearhead a development movent that can counter the top-down planning characterized by today’s global economy. Nothing less, it appears, will suffice if we are to replace the world-wide dichotomy of affluence and poverty with a more equitable, humane, and ecological economy.
Economics As If All Living Beings Mattered
What will be the underlying values of the new economy? David C. Korten claims that “a sustainable society needs a spiritual foundation. Why? Because spirituality, not materialism, is the ultimate foundation of life. Economic liberalism has partly failed, he claims, because of its denial of the human quest for inner meaning and meaningful relations. The late British economist E. F. Schumacher concurs. In his seminal book, Small is Beautiful, he warned against the unsustainable nature of capitalism’s rampant materialism: “Economy as the content of life is a deadly illness, because infinite growth does not fit into a finite world. That economy should not be the content of life, has been told to mankind by all its teachers; that it cannot be, is evident today… If the spiritual value of inner man is neglected, then selfishness, like capitalism, fits the orientation better than a system of love for one’s fellow beings.”
Here Schumacher points out a central dogma in current economic thinking: that it is possible, even desirable, to fulfill infinite human longings with finite things. This materialist philosophy forms the underlying economic doctrine of today’s market capitalism, of our system of unlimited control over productive property. Put bluntly, it supports the dictum that selfishness and greed are good, even necessary fuels for the capitalist engine of growth.
This paradoxical philosophy has resulted in a market system in which land, food, and intellectual ideas are bought and sold without restrictions. As we have seen above, this “free market system” has created an economy of disparity, of unequal buying power, and of a deep schism between rich and poor. More specifically, this philosophy grants the concept of “the divine right of kings” to corporations. In other words, that corporate owners are ultimately only responsible to themselves and their shareholders, not to their employees, nor to the environment, nor to the human community at large. Finally, this philosophy grants that unlimited accumulation of wealth is both positive and a basic human right.
Today it is widely accepted that unlimited exploitation of the globe’s finite natural resources is unsustainable. There is little support, however, for the idea that an economy based on unlimited accumulation of wealth, or unlimited control over private property, may be the direct cause of today’s economic and environmental problems.
Nevertheless, the accelerated accumulation of wealth in the hands of the few, has caused both economic disparity and environmental degradation. In short, while there has been an increase in the unbridled accumulation of wealth–which has resulted in an increase in GNP and per capita income, particularly in the Northern countries–there has also been an increase in the spread of poverty–both in the North, and, particularly, in the South.
As long as the basic tenet of unlimited hoarding of wealth remains fundamental to our economy, economic disparity and environmental degradation will continue. We will continue to accept as fair and inevitable that economic growth creates concentration of wealth, on the one hand, and unemployment, displacement of people and poverty, on the other. Without a fundamental rethinking of the current economic dogma of private property rights as an absolute right above all other values, and that human progress is best measured as increased material consumption, we cannot create an environmentally sustainable and poverty-free society.
Economist E. F. Schumacher wrote that “no system or machinery or economic doctrine or theory stands on its own two feet: it is variably built on a metaphysical foundation, that is to say, upon our basic outlook on life, its meaning and its purpose.” The “metaphysical foundation” of economic liberalism is motivated by self-interest, individual property rights,
and the fulfillment of our material or economic needs.
What, then, should be the basic outlook on life of the new economy? The spiritual conception of wealth, as described by Sarkar, expresses a common sentiment among many alternative development thinkers: “This universe is created in the imagination of the Supreme Entity, so the ownership of this universe does not belong to any particular individual; everything is the patrimony of us all. Every living being can utilize their rightful share of this property…This whole animate world is a large joint family in which nature has not assigned any property to any particular individual.” Sarkar termed this concept of wealth “cosmic inheritance,” and made clear its implications for economic theory: “The system of individual ownership cannot be accepted as absolute, hence [economic liberalism] too cannot be supported.” With a spiritual worldview as the basis for a new economy, the psychology of greed and selfishness is replaced with the psychology of collective welfare and cooperation.
If the purpose of development–as presently conceived–is to increase material amenities, then sustainable development will certainly help us to continue to consume, but it will not help us attain inner fulfillment. Therefore, sustainable spirituality–the idea that true progress is movement toward inner fulfillment, toward self-realization– must be embraced by the sustainable development program. Spiritual progress subsumes material development, as people cannot pursue spiritual growth without adequate basic necessities such as employment, food, shelter, education, and medical care. So, the purpose of development, guided by a sense of spiritual progress, is to help us pursue personal and social pursuits that foster inner growth and communion with people and nature. Activities such as sports, art, music, theater, yoga, meditation, hiking, etc., do not simply fill our lives with more material things, instead they fill our lives with enjoyment, purpose and meaning.
Reverence for nature, for all non-human creatures, is a natural extension of such concepts as cosmic inheritance and spiritual progress. “Our universe,” according to Sarkar, “is not only the universe of humans, but the universe of all; it is for all created entities.” Economic activity, therefore, must take into account the existential rights of other species. This outlook is an integral aspect of what Sarkar terms neohumanism–the view that expands humanism to include a common, unified consciousness behind the diversity of nature. This outlook, this spiritual ethic, is growing amongst many seeking an alternative to the disparities of the global economy. According to activist Helena Nordberg-Hodge, “we are talking about a spiritual awakening that comes form making a connection to others and to nature. This requires us to see the world within us, to experience more consciously the great interdependent web of life, of which we ourselves are among the strands.” Thus, neohumanism–in essence a fusion of spirituality and humanist rationality–is based on principles of love and respect for all beings, sharing, cooperation and spiritual progress. A stark contrast to economic liberalism’s idea that the most conspicuous human motives are self-interest, competition and hoarding of wealth.
Copyright The Author 2003