Ecomodernization

Does Premature Deindustrialization Pose a Threat to an Ecomodern Future?

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August 22, 2016 | Ted Nordhaus

The release of “An Ecomodernist Manifesto” last year sparked a variety of critiques. Some took issue with ecomodernism’s embrace of large-scale agriculture. Others differed with the Manifesto’s focus on growth and modernization, arguing for the opposite: degrowth and lower consumption. And of course there are the traditional environmental bugaboos. Nuclear power. Industrialization. GMOs.

But perhaps the greatest challenge to the ecomodern project isn’t one that its critics seem eager to talk about. There can be no ecomodern future if billions of people remain trapped in deep agrarian poverty. If there is one fundamental characteristic of modern societies, it is that most people have left the farm and moved to the city and have abandoned lives of hard agricultural labor for off farm employment that offers better livelihoods.

About half the world population has made that transition. But half still haven’t, at least fully, and about 2 billion people have barely begun. And therein lies the rub. An ecomodern future—in which all of humanity lives prosperous, fulfilling lives while the human footprint shrinks and nature thrives—is only possible if there is economic opportunity for everyone in cities. And increasingly, a number of important scholars have raised questions about whether the virtuous cycle of urbanization, industrialization, and agricultural modernization will be available to late-developing nations to the same degree to which it has been available in the past.

Manufacturing has traditionally been the means through which poorly educated, low-skilled workers found off-farm employment and higher wages in the city. But rising labor productivity and increasing automation means there are fewer jobs in manufacturing than there used to be. Meanwhile, the globalization of supply chains means that import substitution, the way that industrializing economies have historically leveraged their domestic markets to assure that they capture a share of global manufacturing output, is much more difficult. Almost nowhere is a car, a computer, or any complex consumer product manufactured entirely within one nation’s borders any longer.

“Deindustrialization,” Harvard economist Rodrik observed in an important 2015 paper, “removes the main channel through which rapid growth has taken place in the past.”

Nowhere do the barriers to entry for new manufacturing economies pose greater risks than in sub-Saharan Africa. Manufacturing output, as a share of the total economy, has fallen over the last 25 years across most of sub-Saharan Africa, The Economist recently noted. Without manufacturing or some other pathway to higher productivity economies, there can be no demographic or agricultural transition nor sufficient societal wealth to allow for modern living standards or social mobility.

But all is not lost. Despite the headwinds that Rodrik and others observe, African manufacturing more than doubled over the last decade, growing at an annualized rate of 3.5%. The longer term decline in African manufacturing is attributable to a range of factors beyond the macroeconomic changes that Rodrik rightly worries about, including the end of the Cold War and with it robust development support from the US and USSR for African client states, the decades of civil strife that followed, and the AIDS epidemic.

The danger in the kind of declinist interpretation that some (not Rodrik) have drawn from the ways in which manufacturing and the global economy have changed is that it is easy enough to conclude that there is nothing to be done about it. And that is simply not the case. In a new Breakthrough Journal article, “Taking Modernization Seriously,” New America Foundation co-founder Mike Lind argues that there is still much that developing nations can do to catch up. The key to modernization, Lind argues, remains the critical role of developmental states in building infrastructure and identifying key economic sectors to promote.

The developmental tradition, Lind writes, is Hamiltonian–heavy on machinery and manufacturing, import controls, infrastructure, and public financing of investment and innovation. This “American System,” Lind recounts, was picked up by Friedrich List in Germany and many other European countries to power their own rapid growth. Much farther down the road, of course, China and other “Asian tigers” would follow suit.

What Lind calls the “American System” has fallen out of vogue, but its promise is not lost. “The United States,” writes Lind, “chose to adopt and preach free trade only after its own manufacturing industries no longer needed protection from foreign competition.” Globalization is here to stay and that’s fine, he writes. But countries still need export-oriented growth strategies and developmental states to finance and regulate that trade and to distribute the gains equitably.

Critics of neoliberalism and globalization too often imagine that more equitable and ecologically responsible arrangements might skip the development path that virtually every nation in the world has followed to prosperity. But Lind reminds us that while there is an alternative to the so-called “Washington Consensus” there is no alternative to economic development and modernization. There can be no demographic transition if most people remain in subsistence agrarian economies. And without a demographic transition, a planet of 9 or 11 or even 14 billion people scraping a bare existence from the land is a planet in which virtually every plot of arable land will be converted to low-intensity farming. That is a future that can be neither just and equitable nor ecologically vibrant.

Responses welcome.

 

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BREAKTHROUGH JOURNAL ISSUE 6
 


AFTER THE GREAT TRANSFORMATION

by Ted Nordhaus

 

HIGH-TECH DESERT

by John Fleck

 

MODERN POPE

by Sally Vance-Trembath

 

TAKING MODERNIZATION SERIOUSLY

by Michael Lind

 

AFTER THE BABY BUST

by Paul Robbins

 

LOVE AND VINYL CHLORIDE

by Michael E. Zimmerman

 

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