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May - June 2008
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Little Cays can open Mighty Doors
The potential role of Small & Island Developing States (SIDS) in
the transition from Capitalism to Econologism
by Dennis Pantin
1. Interpreting Arthur Lewis
Sixty odd years ago a young West Indian - who must have been considered
an absolute upstart by the ruling colonial elite - advanced a bold
proposition and economic strategy to rescue the region from the poverty
in which its population was mired. History has been kind to his ideas
which, if they had been implemented, could have led the region to
emulate the successful economic transformation of Singapore, Hong Kong,
South Korea, Japan even. I refer, of course, to Sir W. Arthur Lewis
whose collective intellectual contribution to the discourse on economic
development was recognized in his 1980 Nobel Prize award for economics.
I wish to interpret Lewis’ methodological approach to addressing the
economic development challenge and then apply this to the potential role
and contribution of Caribbean and other small and island economies
(SIDS) to what I understand to be the historic shift now demanded in the
nature of economic, social and political structures on a regional and
global scale.
Lewis’ methodological approach to the development question is
interpreted as having six (6) main elements. First, Lewis was concerned
with the ‘here and now’: the concrete, practical realities/problems
faced by human beings in specific, contemporary socio-economic
circumstances. This is consistent with his definition of economics as
“the study of the conditions under which people live.”
Second, Lewis then sought to identify the causal factors which explain
these realities/problems: distinguishing manifest factors from a
theoretically-mediated grasp of the historic roots and continuities
which explain the core problem(s) at the current conjuncture. Third,
Lewis turned next to identification of generic solutions followed by
identification of the constraints to realizing the generic solutions.
Finally Lewis advanced policy interventions to relax these constraints
together with complementary institutional interventions.
This interpretation of Lewis’ methodological approach to the development
challenge can be illustrated by reference to his seminal contribution to
Caribbean economic thought: “The Industrialisation of the British West
Indies”. Here, Lewis identified the core problem as widespread poverty
in the BWI. Lewis can be interpreted to have then advanced what the
literature on the philosophy of science would term a ‘a bold hypothesis’
to the effect that: The British West Indies (and by inference other
Caribbean countries) could liberate themselves (from what George
Beckford later called) ‘Persistent Poverty’ by investment in high income
elastic, manufacturing products for export to metropolitan markets given
the (then) dominant manufacturing product processes required a
substantial, not particularly skilled, labour input thereby providing a
comparative advantage opportunity to low labour cost countries.
Imagine how audacious if not outrageous Lewis’ proposal must have
appeared in the context of a reality in which 50% of the labour force
was in agriculture; education was focused on the primary level, income
was low and most importantly the British colonial office had already
accepted and embraced the recommendations of the Moyne commission for
social welfare improvements but maintenance of the economic status quo
ante in terms of continued primary agricultural production. It would be
left to the resource poor countries of Asia: Japan and then South Korea
and the island economies of Taiwan, Singapore and Hong Kong to exploit
the then available labour intensive manufacturing production processes
and implement export manufacturing.
2. The 21st century problem : Global and
Regional Ecological Crisis : Are We At The Tipping Point?
In 2008, as the first decade of the 21st century comes to an end, I wish
to propose that the core problem is an ecological time-bomb ticking away
at the global (including Caribbean) environment, society and economy.
The two key concrete manifestations of this ecological crisis are the
widespread and deepening degradation and destruction of the natural
environment together with social implosion and incipient civil war. This
concept of ecological does not exclude human beings from the matrix of
an integrated analysis. In fact, human beings are central to a holistic
understanding of the core problem and the undamental causal factors
addressed later.
Hawkens et al in a 2001 book on “ Natural Capitalism” point out, for
example, that “Humankind has inherited a 3.8-billion-year store of
natural capital. At present rates of use and depletion, there will be
little left by the end of the next century”.
Summary empirical indicators of global environmental decline include the
fact that tropical rainforests are estimated to be disappearing at a
rate of 100,000 acres per day. Moreover, some 66% of the global forest
loss from 2000- 2005 is estimated by UNEP to have occurred in the Latin
American and Caribbean region. On average freshwater species populations
fell worldwide by about 50% between 1970 and 2000. Since 1900, more than
50% of the world’s wetlands have disappeared. Significant reef
degradation also has occurred in ninety-three (93) of the 109 countries
in which coral reefs occur.
Carbon Dioxide, global warming and climate
change
There is a possibility of a 1.8 to 6.3° Fahrenheit rise in temperature
during this century if atmospheric levels are not reduced. The potential
effects include extreme weather events, such as droughts and floods;
threatened coastal resources nd wetlands by rising sea levels; increased
risk of certain diseases by producing new breeding sites for pests and
pathogens. Agricultural regions and woodlands are also susceptible to
changes in climate that could result in increased insect populations and
plant disease and reduced biological diversity. (EPA, 2007)
Environmental Trends in the Caribbean
Environmental degradation trends in the region reflect the global. Since
1980, arable and cropland in the Caribbean has risen 20 per cent. As a
result the annual loss of forest cover has averaged 1.7 per cent while
the freshwater fish catch has declined by 12 per cent. Urban growth, 50
per cent greater than population growth since 1980, has resulted in
substantial discharge of improperly treated waste. In 1991, only 10 per
cent of the Caribbean population was served by central sewerage systems,
and nearly 60 per cent of treatment plants in the Eastern Caribbean were
operating inefficiently. Very little has changed since then and over 80
per cent of improperly treated municipal waste is estimated to be
discharged directly into the sea (UNEP, 2000).
Marine resources also have be altered by inland activity, coastal
construction and over-fishing. More than 10 million tons of eroded
sediment is deposited yearly in coastal waters of the wider Caribbean
because of deforestation and poor agricultural land practices (UNEP,
2000:44). Caribbean reefs, which represent 12 per cent of the world
total, are in substantial retreat: exacerbated more recently by climate
change-induced coral bleaching
Future Regional Trends
UNEP’s 2002 outlook for the future of the Caribbean environment included
a 30-year forecast which concluded, inter alia, that increased
globalisation and trade will put further pressure on terrestrial and
marine resources and that without significant policy reform, market
forces will weaken long-run management practice for short-term
commercial gain, with continued deforestation and erosion projected.
Social Implosion as manifested by Crime
The growing crime pandemic is now exacerbated by increasing attacks on
the very fabric of the system of justice and even on sitting
Governments. A recent United Nations and World Bank study on Crime and
Violence in the Caribbean reports, for example, that the murder rate in
the region at 30 per 100,000 of population is the highest for any region
in the world. This murder rate has been estimated by the ECON0MIST
magazine to be four times that of North America and 15 times that of
West/Central European average.
Pollution
Pollution: both the ‘ human pollution of poverty’ and as well solid,
liquid, air pollution (inclusive of the toxic dimensions of these waste
types) are themselves symptomatic of the failure to recognize that the
domination of man over nature may arrived at the ‘tipping point’ where
nature is now reacting in terms of negative feedback loops.
3. Generic Solution: The Tectonic Shift From
Capitaliskm to Econologism
The generic solution to the specific contemporary, core realities and
problems in the Caribbean today cannot be divorced from the larger
global frame in which the region is enclosed.
The key generic, global solution is the urgent need for a tectonic shift
from man’s domination of nature to a symbiotic relationship between man
and nature. It is a moot point as to whether capitalism can make this
shift. Hawker et al (2001) have expressed optimism, for example, that
capitalism can be transformed into what they call natural capitalism:
meaning by this an integration of the economy and nature and they
provide examples of actual changes in business systems along these
lines. A similar position is articulated by Anderson and Leal(1997) in
terms of what they term ‘Enviro-Capitalism.’
It is, however, a race against time (and ecological melt-down) since, as
Hawkens et al themselves concede: This newly emerging pattern of
scarcity implies that, if there is to be prosperity in the future,
society must make its use of resources vastly more productive: deriving
four, ten, or even a hundred times as much benefit from each unit of
energy, water, materials, or anything else borrowed from the planet and
consumed”.
Econologism
Certainly, in the same way that the transition from feudalism to
capitalism passed through the stage of merchant capitalism one can infer
that capitalism is not going to simply disappear one morning. What one
can more logically infer is that capitalism - when it has clearly and
manifestly become a ‘fetter’ on human survival and advance – will morph
into another mode of production which would have to be based on a
symbiotic relationship between man and nature. Let us call this desired
shift: ECONOLOGISM.
The term draws on the fact that both Eco-nomics and Eco-logy derive from
the same common Greek root word: Eco: meaning Household with the former
(Eco-nomics) referring to the human household and the latter (Eco-logy)
to nature’s household. It is understandable that at the time that the
Greeks were ‘naming’ their reality they would distinguish between the
human and nature’s household. Today, however, this is not possible or
realistic in terms of the impact of human beings on nature and Marx’s
seminal observation that capitalism marked the tectonic shift from the
domination of nature over man to man’s domination of nature. The terms
ECONOLOGISM, therefore, seeks to emphasise the need to integrate both
‘households’ in a symbiotic relationship.
4. Constraints to Realizing Econologism
Four constraints are identified as blocking the historically required
tectonic shift to a symbiotic relationship between man and nature and
these are addressed below.
(i). Theoretical/conceptual constraint
Increasing disciplinary specialization in academia and emphasis on
empiricism has produced a wealth of information but a poverty of
understanding of the ‘integratedness of things’. The discipline of
Economics is perhaps most at fault here but is not singular in this
respect. This blind spot is best illustrated by the dominant
neo-classical economics which perceives the open world economy as the
unit of analysis in a so-called globalised world. In fact, the open
world economy (or open national economy for that matter) is really a
sub-set of two other integrated elements of human reality: society and
the closed eco-system.
The recognition of the closed eco-system alerts us to the logical
conclusion that there are limits to the expansion of production and
consumption which draw on the environment as a source of useful material
inputs but also simultaneously depend on the very same environment to
serve as a sink for their waste.
Environmental disciplines have contributed to our enhanced awareness of
the importance of the natural environment and this needs to be
acknowledged and applauded. However, there is a problem with a
narrowly-conceptualized environmental perspective which sees human
beings merely as ‘villains’, as it were, as opposed to recognizing that
there also is a social ecology which needs to be linked to the natural
ecology since they both form an ineluctable, integrated whole.
(ii). Sustainable Development Impossible in One Country
There can be little chance of sustainable development in one country
given the recognition that the ecological problem is global in nature.
However, we are not all coming to the problem from the same initial
conditions. Herman Daly has provided a useful framework by
distinguishing between ‘Over-developed’ and ‘Under-developed’ economies.
An ‘over-developed’ economy can be defined as one whose per capita
natural capital impact, if generalized to the world’s population, would
lead to ecological collapse (e.g. USA).An ‘under-developed’ economy, on
the other hand, is one whose per capita natural capital impact is not
merely well within global carrying capacity but as such a low material
level as to only reproduce global poverty and misery if generalized to
all countries (e.g. Haiti). To these two categories of Daly I would
myself add the concept of the sustainably developing economy: defined as
one which shows positive trends in terms of the economic, socio-
political and environmental indicators of sustainable development
(Scandanavian countries are perhaps examples).
(iii). Capitalist ethos of self-interestedness and the Elephant
Constraint
The rise of capitalism is, therefore, the critical theoretico-historic
frame within which to locate the current dominant realities of
environmental destruction and social disorder. (This is not to
acknowledge, as Marx himself did, the positive forces released by
capitalism). Substantial profits are being made by firms and countries
from the status quo ante in terms of exploitation of natural resources
and emitting of pollutants. The ‘Elephant constraint’ therefore refers
to the fact that ‘Over-developed’ economies and large population,
integrated economies in general, are like elephants: very big and
dominant but slow to ‘shift gears’ or change direction. In purely
economic self interested terms, there are trillions of dollars tied up
in assets which would need to be written off for the tectonic shift to
ECONOLOGISM to be realized. Moreover, one of the derivative constraints
would be the uncertainty as to the success of introduction of new,
symbiotic production and consumption patterns.
(iv). The Governance problem
Finally, government ‘capture’ by the owners of these assets (including
widespread stock market equity ownership) implies that there are
governance constraints (both corporate and national) to the type of
radical shifts demanded.
5. Little Cays Can Open Mighty Doors : The Case
For Eco-Caribe
David Rudder, in one of his calypsos, laments a world ‘which does not
need islands anymore’ alluding to the historic role that sugar cane
plantation slavery played in the transition to industrial capitalism.
Eric Williams captured this historic contribution in ‘Capitalism and
Slavery’ where he noted that: “The commercial capitalism of the
eighteenth century developed the wealth of Europe by means of slavery
and monopoly…(and) helped to create the industrial capitalism of the
nineteenth century.”
However, in another of his calypsos, Rudder opines that ‘little cays can
open mighty doors’. I concur and I am positing that Small and Island
Economies (SIDS) can play a decisive role by active policy interventions
and institutional innovations to provide a similar knowledge development
as that described by another historian, Philip Curtin, who pointed that
that plantation slavery contributed substantially to the knowledge base
of industrial capitalism: “. . .the Europeans who ran the (plantation)
complex learned a great deal from the experience - in ocean shipping,
tropical agriculture and economic management at a distance. All this is
a part of the background of the industrial age” (Curtin1998, p. 204).
The bold hypothesis which I am advancing, therefore, is that: The Small
& Island Economies (SIDS) of the (greater) Caribbean (in collaboration
with SIDS in the rest of the world) have the potential to repeat the
catalytic contribution made by this region to the tectonic global shift
from merchant to industrial capitalism: this time on own and active
account and to mutual benefit of all (regionally and internationally).
The ‘elephant’ constraint provides an opportunity for small and island
economies for several reasons. First, the asset constraint in SIDS is
not as critical in that there is no stock of assets worth trillions of
dollars which would need to be written down or off. Second, the evidence
from the economic literature on innovation points out that the diffusion
of what is called new “techno-economic paradigms” tends to be more
quickly embraced by those at the periphery of the dominant existing
paradigm. Moreover, new innovations also tend to be more rapidly
embraced by those who have little to lose and much to gain since they
are already in desperate circumstances. On all these three scores, many
small and island economies in the larger Caribbean region would seem to
be well-placed for an early embrace of ECONOLOGISM: We have little to
lose and much to gain. Moreover, we are already in significant
ecological crisis both in social and environmental terms as described
earlier.
Small islands can usefully serve as laboratories for testing theories
and linked strategies and policies to realize the transition to
ECONOLOGISM since SIDS possess four additional advantages on this score.
- There are a large number of small islands scattered almost
randomly across all the continents and latitudes.
- These islands are of varying sizes and hence offer some variety
in the ‘test’ conditions, while remaining within an acceptable
range.
- There is a variety of both biological and cultural diversity
across these islands to reinforce the ‘laboratory’ testing criteria.
- Finally, the population of the global community of islands also
faces a range of political systems from the traditional ‘chiefdoms’
of the Pacific, through autocratic, authoritarian and more openly
democratic and participatory forms of governance.
In other words, SIDS can serve as a ‘laboratories’ to test and
perfect new techno-economic paradigms. Small and island economies
can thereby illuminate the theoretical and strategy/policy
challenges in simultaneously creating fully employed, globally
competitive economies, adapting/ building resilience to natural
events/climate change, as well as creating consumption and
production patterns which are within the eco-cultural carrying
capacities of small places together with economic and
socio-political equity: ECONOLOGISM for short.
Specific Policy Interventions: ECO-CARIBE
The desirable outcomes will demand a shift to maximizing
eco-culturally enhancing production and consumption patterns and
minimizing eco-culturally degrading patterns. These in turn will
require industrial, trade, technology and Human Resource policies
buttressed by foreign investment, fiscal and monetary policy. What
is being proposed is, in effect, an ECO-CARIBE initiative in which
Trinidad and Tobago can play a leading role given its current,
temporary hydrocarbon windfall.
Industrial Policy: To target production and consumption patterns
which maximize eco-culturally enhancing investments and minimize
eco-culturally negating investments.
Trade Policy: To reinforce industrial policy by linking trade policy
and negotiations to the demands of ECONOLOGISM.
Technology Policy: To further reinforce industrial policy by
investment in and/or import of technologies which also are sensitive
to the overarching demands of ECOLOGISM.
Human Resource Policy: To provide the human resource values and, as
well, skills demand for ECONOLOGISM.
Foreign Investment Policy: To target foreign investors who will
contribute to the solution, not exacerbate the problem.
Fiscal and Monetary Policy: To be used to steer production and
consumption systems in the desired directions through a mix of
incentives and disincentives (e.g. greening of taxation).
Institutional Interventions
There is no need for additional institutions at the regional or
inter-regional SIDS level but for improved collaboration and
partnerships among existing ones such as CARICOM/CARIFORUM, CEHI,
CDB at the inter-governmental level together with a range of
regionally linked professional, business, trade union and NGOs
organizations. UN agencies such as UNEP, UNDP, UNESCO, FAO, UNIFEM,
etc are obvious bridges to the international community together with
a range of private, foreign foundations. UWI and other universities
and research centres clearly would have a critical role.
ECO-AOSIS
At the inter-SIDS level there exists the Association of Small Island
States (AOSIS) and also the incipient University SIDS consortium
involving UWI and the Universities of the Virgin Islands, Malta, the
Pacific.
Governance Reform
Finally, there would be need at national and regional level for
governance reform to provide ‘Voice’ for a range of communities in
the determination and implementation of the policy matrix in the
transition to ECONOLOGISM.
Conclusion
‘Ridiculous’, you say, in response to my hypothesis and proposal as
your eyes remain fixed on the ground? Arthur Lewis must have faced a
similar, even more negative reaction in 1950. However, hopefully,
the intervening 60-odd years has led to sufficient emancipation from
‘mental slavery’ to allow you to raise your head and see the sky is
the limit in terms of the possibility and opportunity we can draw
out of the global ecological crisis. A summary of the lecture
delivered on Wednesday March 19, 2008. 7:00 pm. UWI, St Augustine
Campus. For the full lecture Visit:
http://sta.uwi.edu/dpantin
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