False Alarm

In The Rise and Fall of Great Powers, which touched the anxieties of conservatives as well as liberals at the end of Reagan’s expensive two terms in the White House, Paul Kennedy suggested that like other great powers before it, the United States was dissipating the resources that had made it great. It was in ‘imperial overstretch’. And its political system, like that of Britain earlier in the century, would make the decline more difficult to stop. But Rise and Fall, a critic said to Kennedy at the Brookings Institution in Washington in 1988, was too conventional a book. It mistakenly supposed that the problems we faced were the problems of states, and that the solution to them, if solutions there were, were political.

One might think that Kennedy was right. The war in the former Yugoslavia; the slaughter of one group by another in Shaba – the old Katanga – in southern Zaire, and in neighbouring Burundi also, both on a similar scale to that in Bosnia and just as horrible; the collapse of Somalia; the revival of the war in Angola; the fragility of South Africa; skirmishes through the southern parts of the Russian Federation; the persecution of Kurds in Turkey, Palestinians in Israel and marsh Arabs in Iraq; incipient civil war once more in Cambodia; running battles in the further reaches of Indonesia; communal violence in Kashmir and parts of India, the dispute between the Singhalese and Tamils in Sri Lanka, Dhaka’s suppression of the native inhabitants of the Bangladesh Hill Tracts, and a new crisis in Pakistan; guerrillas and drugs in Peru and Colombia; Northern Ireland; the deteriorating situation of blacks and urban violence in America itself: the sites of violent death and destitution in the world now, and the seeming inability of the United Nations, the Western European powers, the United States, and other governments – where they’re not themselves the cause – to do much about them, suggest that it’s politics that presents the problems and politics that stands in the way of solving them.

But Kennedy took the critic of Rise and fall at his word. The big issues that face us, he was persuaded, are global, not local, and not immediately political. In thinking about Preparing for the 21st Century, he came to believe that four of these big issues – population growth, changes in patterns of international investment, the implications of biotechnology and ‘robotics’, and environmental damage – are especially threatening. He talks about them in the first part of the book. In the second, he guesses at the impact each might have on various parts of the world, and at the likely capacity of states in these places to cope with them. ‘If ever there was a book which no globally-thinking person can safely ignore,’ his publishers declare, ‘this is it.’ They are mistaken. Kennedy confuses symptoms with causes, the shorter term with the longer, and what’s truly ‘global’ with what isn’t. He also avoids the central issue.

He starts with an alarm about population. The most reasonable projection is that by 2025, there will be about half as many people again in the world as there are now. Nearly all the increase will be in the poor South and the non-white communities of the North. In the 1790s, setting the fastest known rate of population growth (in the North American colonies) against the highest known rate of increase in the production of food (in late 18th-century England), Malthus argued that unless there were to be ‘preventive checks’ – the ‘vice’ of birth control and restraints on marriage – the poor would starve and die. As he himself came later to see, this was too bleak. Further advances in agriculture, industry and overseas migration enabled more people to survive and eventually to prosper than he’d thought possible. But in the 1990s, Kennedy argues, the Malthusian fear is a fact. Many of the most critical problems in the world now are the result of ‘population pressure’, and they can no longer be solved by migration or improvements in production.

This is misleading. All his examples of the effects of population growth – the destruction of forests in the Amazon, for instance, the salinisation of irrigated land in Central Asia, and what he sees as rebellions of angry youths in Central America, Southern Africa, South-East Asia, Afghanistan, Kashmir, Northern Ireland, the Horn of Africa and the Gaza Strip – have other causes. Until the scheme was abandoned a few years ago, the clearing of the forests in Amazonia had to be encouraged by subsidies from Brasilia. The vast cotton fields of Kazakhstan, sucking in enormous amounts of water and spreading a self-defeating salinity, are the result of decisions by Soviet planners whose need for cheap fibre outran their good sense. Neither has had anything to do with pressure of numbers. And for every growing population in which young men agitate, there’s a score in which they don’t. People, one can agree, are a necessary condition of what people do. But they are nowhere sufficient to explain it.

On the use of resources, Kennedy concedes the point himself. If we continue to live as we do – he quotes the Ehrlichs, indefatigable propagandists for the view that we shouldn’t – each new American will continue to consume twice as much as each new Swede, three times as much as a new Italian, 13 times as much as a new Brazilian, 35 times as much as a new Indian, and nearly three hundred times as much as a new person in a country like Haiti or Chad. Others whom he doesn’t mention – I think for instance of a paper at the conference on the environment and development organised by the International Council of Scientific Unions and the Third World Academy of Sciences eighteen months ago – calculate that if existing habits continue, the increase in emissions of carbon dioxide from the North over the next forty years – that’s to say, from places in which the growth of population will be negligible or actually negative – will be greater than those from the whole of the rest of the world.

Kennedy’s fears about future patterns of production are equally unreal. Biotechnologies, he reports, can now extract vast amounts of extra calories from the beasts, and make plants grow bigger and better where they’ve never grown before. Indeed it’s now conceivable that all the people in the world in 2025 could be fed from the United States alone. Likewise ‘robotics’, as he says, can dramatically improve productivity in industry. But it’s idle to suggest, as he does, that such changes will spread so far at the start of the century as to displace the expanding labour forces in the South. The amount of capital that’s required to introduce them is enormous. Producers would want to be sure there was no cheaper way. The likely future is altogether more prosaic. The International Rice Research Institute in the Philippines, for example, which has been developing new strains of the grain and new ways of cultivating them since the Sixties, is now convinced that by improving rice still further, and by using land in the presently uncrowded continents of Latin America and Africa – a move which would also increase exports from these places – the needs of Asian rice-eaters can be met for the next thirty years. Industrial investment in the South may also increase. This investment, it’s true, is now heavily skewed away from the poorest parts of the world. But global or multinational corporations, and the increasing number of ‘trans-nationals’ also (firms which devolve more of their decisions to the local area) go to where labour is cheap and there’s a promise of new markets. In those kinds of manufacturing, and there are many, which do not require advanced technology, there are advantages in locating in the South. (Corporations which are falling over themselves now to get into China may be trying India next.) Once again, large populations are neither here nor there. As Marx said to the Malthusians, it’s where the money moves that matters.

Kennedy, however, persists in his idée fixe. He seems to assume that if people can reproduce, they will. If reductions in infant deaths allow more children to survive, he suggests, men and women will always take advantage of the fact. This is not correct. Where fertility rates – which he over-simplifies – stay high, there’s always a reason. Large families in many parts of the poor rural South – in most of sub-Saharan Africa, for instance, and in large parts of South America – are a response to the fact that in these places there has been and continues to be more land to work than there are people to work it. And where there’s not the land, as in other parts of Africa and the Americas and in most of south and east Asia, the conditions of production are still such that more hands mean more output, and more security too. This is true also in the towns. By our standards, as Kennedy says, cities in the South are appalling. What he doesn’t explain is that in the so-called ‘informal’ economics in which the larger part of their inhabitants scrape a living – mending things, moving them about, making them (if they’re simple), and providing every kind of personal service – there’s always work for an extra pair of hands. He does mention an econometric study for the World Bank which suggests that on average, a 1 per cent rise in income can mean a 3 per cent fall in fertility. But he seems not to see that this means income from the ‘formal’ economy. The standard comparative measure of income – the dollar equivalent of average earnings per head – takes account only of the money that passes through the national accounts, and is often less than half the cash that’s actually circulating. In China, the $350 per head per year which on average people are now reported to earn, a figure on which Kennedy relies, is probably less than half, perhaps even a quarter, of what they get from other, often very labour-intensive transactions.

Poverty and insecurity, moreover, are not natural facts. Kennedy doesn’t mention that according to the United Nations Development Programme, poverty increased everywhere in the Eighties, except in China and India, and that the largest increases were in those places in the South from which there was a net outflow of money. He does say that in the Eighties these flows – payments of interest on debt and repayments of the principal, repatriated profits, capital flight, royalties, and fees for patents and information – were high. The South was paying out on average forty or fifty billion dollars a year more than it was receiving. What he doesn’t mention also is that it’s the United States which benefited most from the imbalance. At its peak in 1987, the net resource transfer to America from the rest of the world was $151 billion. Just under half came from developing countries, 2 per cent or so of their national product. The total inflow into the United States over the past 13 years stands at about $980 billion. And now that Europe is once again having to import capital from America, and many of the dollars which fled to the United States from Latin America in the Seventies are going back, it’s left to Japan and other places in Asia and, amazingly, to Africa to continue to finance the United States into the Nineties. Washington nevertheless still uses its carefully guarded power in the international financial institutions to insist that as a condition of continued aid to the South – proportionately and absolutely less of which it now contributes itself – the recipients open their economies even further to its exports. Indeed, apart from those places in which there’s been a civil war, it’s arguable that in the Eighties it was the demands of the so-called ‘Washington consensus’ – not population growth, technical change, environmental degradation, nationalism, AIDS, Islam, or any of the more usual suspects – which were the main cause of poverty and insecurity in the South. Such problems aren’t always eased by the presence of more people. They are caused, however, by the increasing inequities in the international economy and in poor countries themselves, by fiscal difficulty, administrative incapacity and bad policies. It follows that even if it were possible significantly to reduce fertility in poor countries, which it’s not, to do so would solve little. The poverty and insecurity that Kennedy attributes to the growth of populations have more immediately economic and political causes.

In the brief conclusion to his chapter on ‘Winners and Losers in the Developing World’, Kennedy agrees that ‘the developed economies appear to have all the trump cards in their hands – capital, technology, control of communications, surplus foodstuffs, powerful multinational companies – and, if anything, their advantages are growing.’ He admits that the pressures on poor economics now from multilaterals like the World Bank as well as bilateral donors – pressures to abolish price controls, remove subsidies, withdraw funds and workers from state-related activities and the state itself, and open up to external competition – are often unrealistic and usually traumatic. He concedes that however much the donors say they want these economies to imitate the success of South Korea, Taiwan and Singapore, it’s going to be next to impossible – for internal and international reasons – for more than a few to do so. And he suggests, uncontroversially, that the countries most likely to escape the trap in which many of those in the South find themselves are those in which there are high rates of saving and investment, decent education for all, a ‘manufacturing culture’, a surplus on trade in visible goods, and effective ‘political leadership’. This is all true. But it raises issues for the present and the foreseeable future which he does not discuss.

The first is the capacity of states themselves. Instruments of state, as Kennedy himself observes, are weakening. What he means is that although they’re stronger than they’ve ever been, they are not very effective in the face of supposedly ‘global’ problems. The most important of these problems, however, is one he barely mentions. Some environmental damage, of course, does extend beyond the boundaries of the states in which it’s caused. So also, at least in so far as it prompts out-migration – which isn’t nearly as often as many, including Kennedy himself, believe – can population growth. But these are not the most important problems of a ‘global’ kind. Much more serious is the loss of economic control entailed by the private speculation in currencies that followed the US Government’s decision in 1973 to abandon fixed exchange rates against the dollar and the wholly uncontrolled direction of private direct investment. The daily value now of currency transactions is perhaps a hundred times greater than that of all other trade. Even the richest economies – as those in the European Community’s Exchange Rate Mechanism learnt last year – have little defence against speculators. These economies, however, do at least benefit from overseas investment. At the end of the Eighties, they were getting three-quarters of it. The forty or so poorest, by contrast, those least able to resist the insistence of the IMF and others that they should liberalise in order to attract it, received just 0.7 per cent. As the director of the IMF agreed in the Eighties, the Fund’s drastic policies make no sense at all in the face of this degree of imbalance and Northern governments’ insistence on practising the protection they refuse to allow the South.

The second issue is the willingness of politicians to use the instruments of state. Those that can be domestically effective are instruments to which liberal governments – most conspicuously in the United States and in Britain now – are ideologically averse. It’s in Japan and the other East and South-East Asian countries that there’s a theory and practice of government which is sensibly indifferent to the self-defeating liberal enthusiasms of the West and better suited to the future. This is why, though Kennedy does not say so, the aid now extended from Tokyo – equal to that from any other single source and, unlike that from any other, increasing – is most constructive for the South, as its recipients acknowledge. In this and other respects Japan is not at all ‘aloof’ and ‘unhelpful’, as Kennedy, like so many others in America, unthinkingly accuses it of being.

Third, and most important, is the question of whether the stronger states have the will to exert themselves internationally, and of whether existing international associations – the associations of states themselves, the international banks and the United Nations – are minded to do what the problems that now face most of the world suggest they should be doing. We can agree with Kennedy that we’re not well prepared for the 21st century. But this isn’t for the sorts of reason he dwells on. It’s because after the Cold War there isn’t the determination in the West, even indeed the inclination, that there was towards the end of the Second World War to face the destructive irrationalities of the international economy and the assaults on one group by another that arise from government weakness. On the contrary. The view that’s been pressed by the West on the rest is that global liberalism is the solution. Internationally, however, it’s the problem.