Mittwoch, Dezember 19, 2007

Now this is embarrassing...

This was in today's WSJ.

It's one of the more embarrassing articles I've ever seen: Pete du Pont is usually much better than this.

The gist of the article is that the developing world wants the industrialized world to grow slower so that the developing world gets a larger share of world growth, and is using Bali and the worthless pieces of paper signed there to force slower growth in the industrialized countries.

This is so obviously wrong that it is embarrassing.

First of all, growth is not a zero-sum game: world growth is NOT distributed automagically by the gnomes in Zürich, aided by the Bilderberg Secretariat and the Masons. It's simply the value added in production, in economic activities, and how it changes from year to year.

Second, what are the major markets for goods from the developing world?

That's right, the industrialized countries. They are, after all, the ones with the money.

So according to Pete, the developing countries want the industrialized countries to grow slower so that the developing countries can have a bigger slice of the pie, but that would mean that the developing countries would see demand from their key markets slow, making it harder for them to grow. Wait a second, how does that work...

This is embarrassing. Pete, what were you thinking???

The only reason that the conference in Bali led to the result it did is that it is the environmental movement and its hysteria that wants growth in the industrialized countries to slow. But this is first and foremost not a question of whether there is too much growth, but more fundamentally a question of control.

If the environmentalists gain control over investment decisions, over allocation decisions, over decisions that are best made in the market, they will gain control, indirectly, over the means of production, achieving via deception what communists and other leftists have been trying to do for the last 90 years.

The irony of this is that the environmentalists are truly, truly clueless when it comes to choosing the optimum for dealing with scarce resources. This is the field of economics, not environmentalists: placing an absolute value on "the fate of mother earth" means nothing less than subjugating all human activities to that goal, starting with economics, but scarcely ceasing there.

This is where the environmentalists simply do not understand what is meant by consumption, nor do they understand the role of innovation and technological development. Consumption doesn't destroy natural resources: it transforms them. Consumption is the purchase of goods and services by consumers: it is not the destruction of raw materials. Industrial metals are already heavily recycled, because it makes eminent economic sense to do so: when you buy copper pipes, the chance that these are made of virgin copper is small. Moreover, the copper isn't destroyed when it is transformed from scrap copper to copper pipes, but rather transformed: when they are replaced, they will also be recycled.

Faced with scarcity, humans have always found ways around a lack of raw materials, a lack of space, a lack of skills. Japan has virtually no raw materials, but is an industrialized society because its people were forced, as it were, to do more with less. Forbidding this, by making it impossible to innovate to meet consumer demands, is a path to stagnation. Stagnation, economically, is a catastrophe, as it is only by adding value that you can create capital. Stagnant economies are poor economies, with little chance for improvement.

The environmentalists want to keep you poor, under control and there are not a few who don't want to see you even live.

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