How the Economy Was Lost: The War of the Worlds (Counterpunch) (23 page)

Chapter 53: The Need for Planning

I
n their book,
Ecological Economics: Principles and Applications
,
Herman Daly and J. Farley point out that in the 20th century both the Soviet Union and the U.S. had economic growth as their first priority. In the Soviet Union, Marx’s “new socialist man” would appear only with the disappearance of scarcity, which required the maximum growth in output. In the U.S. high growth was the way to avoid class conflict by producing a larger pie to divide.

Despite their vaunted mathematics, economists have failed to understand that infinite growth in a finite system is impossible. The Soviet economy failed first, because its gross output indicator was more inefficient than the price and profit indicators used in the West.

The West saw Soviet economic failure as proof of market capitalism’s superiority. This conclusion was correct up to a point, but the “end of history” euphoria neglected the real end of history implicit in the exhaustion of environmental capital.

For organized human society to deal with the consequences of this exhaustion, planning is essential. But planning is discredited by Soviet failure.

Fortunately, the planning required bears no resemblance to Soviet planning, which was ideological in origin. As I proved in my book,
Alienation and the Soviet Economy
(1971, 1990), the purpose of Soviet planning was to totally eliminate the market and the price and profit signals upon which it relies, and to organize the entire economy as if it were a self-sufficient farm producing for its own use. In a modern economy with large numbers of input and output combinations, this is a strict impossibility.

This is not the kind of planning needed to stave off societal collapse from environmental exhaustion.

As was explained earlier, external costs are not that important in an empty world. But in a full world they may be determining. If external costs were included, many projects today would not get off the ground. Moreover, if economic growth included the external costs of environmental exhaustion, it might not pay.

In 2006 Dmitry Orlov compared the Soviet economic collapse with the coming U.S. economic collapse and concluded that the Soviets were better positioned to survive the economic collapse.

For example, the U.S. is massively dependent on depleting water and energy resources, especially petroleum energy in which it is not self-sufficient. Russia is an exporter of energy. Russia was not dependent on a car economy. Russians could meet their occupational and shopping needs with public transportation. Occupants of Russian housing, as bad as it was, were not subject to mortgage foreclosures and homelessness.

Russians were inured to hardships and accustomed to bartering for their needs. Russian families tended to be in the same place and supportive. U.S. families are widely scattered and less able to come to one another’s help.

Despite the notorious failure of Soviet agriculture, basic foodstuffs—cabbages, onions, potatoes—were close at hand. Even many residents of cities had access to garden plots. Even the largest metropolitan areas had surrounding agricultural areas. In the U.S., food is trucked in from vast distances. Garden plots are rare outside of rural areas.

Soviet medicine focused on prevention with immunization programs, infectious disease control, and basic care. The state run clinics and hospitals were not profit-based. In the U.S., health care is a profit system in which doctors refuse to diagnose, instead ordering expensive tests in order to protect themselves against liability claims. If profits leave the system, financing collapses.

My summary barely does justice to Orlov. But the point comes across. The U.S., unlike the Soviet Union, is import-dependent for energy and manufactured goods. Americans are dependent on private cars for access to their jobs, food, and medical care. A disruption in gasoline supply automatically disrupts food deliveries to stores and the ability of the work force to show up for work. Americans are not inured to hardship and lack survival skills.

The development pattern of the U.S. was based on abundant and cheap gasoline. Urban areas became huge metropolitan areas of suburban sprawl, with people traveling large distances on a daily basis in order to earn their keep and to meet their needs.

Surplus U.S. food stocks that were the products of agricultural subsidy programs have been eliminated. Agriculture is increasingly concentrated in large factory farms, whether for grains or meat. Even dairy farms are falling into concentrated hands. Food output is increasingly centralized in locations distant from most cities. A transportation disruption will disrupt food distribution.

While there is time, the U.S. should give thought to the energy implications of suburban development, perhaps subsidize, if necessary, food production near population concentrations, require development plans to specify the water resources, create public transportation systems that can be run by renewable energy, and otherwise prepare itself for both the exhaustion of nature’s resources and of the U.S. dollar as world reserve currency. If the future is left to take care of itself, organized society in the U.S. could fail.

The problem with planning is not only government inefficiency, but also the power of organized interest groups to use planning to elevate their interests above those of society. Much thought would have to be given to preventing planning from becoming just another tool of interest groups. Perhaps giving key roles to bodies of independent experts and scientists could mitigate the political corruption, assuming there are still any experts and scientists who are independent and not corruptible.

There is no doubt that the efforts of humans, being imperfect creatures, to plan for life in a full world would be beset with errors and miscalculations. But however imperfect the product would be, the result would be better than what would result from the economists’ assumption that man-made capital is a perfect substitute for nature’s capital and that, therefore, resources are inexhaustible. To conclude that our future is a continuation of the past is a death warrant for U.S. society.