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Image header Agence Europe
Europe Daily Bulletin No. 9843
A LOOK BEHIND THE NEWS / A look behind the news, by ferdinando riccardi

Considerations about some of the truth hidden behind economic crisis

The way in which anti-crisis plans are proposed, announced or commented on is a distraction from some of the fundamental considerations that are deliberately neglected or simply ignored by those who have never thought about this issue. It is impossible to repeat the general comments made all the time and which make up the backdrop to the real situation but the powers that be, as well as the commentators, should always bear them in mind. I'll cite three of them: the first has a general character, the second is of an economic dimension and the third involves a specific industrial sector.

World's population explosion. The figures are no secret and no-one is unaware that after thousands of years of moderate growth, the world's population has literally exploded and that the rate of growth is untenable. It is understandable that this aspect does not take up much space in the urgent discussions on economic issues or related projects but it is more astonishing that the question is practically absent from the debates on climate change and dangers of food shortages, areas where the issue is obviously of crucial importance.

Calculations or forecasts on the demographic explosion are not in short supply. What is missing, however, is what lessons should be drawn from them. The figures prove that the growth programmes in a given country or continent will be ineffective and dramatically insufficient when they are faced with demographic pressure. It has been demonstrated that deforestation, destruction of biodiversity, desertification etc are inevitable given the current expansion in world population. But not even a word has been uttered to denounce the essential cause for these announced disasters or on the need to make the appropriate corrections. Visionary thinkers announced crazy projects for colonising other planets, instead of denouncing the unsustainable and unlimited growth in the global population. The current rate is unsustainable for the whole planet. It will not be life that will be destroyed but humanity. Life will continue without man. The hegemony of the dinosaurs lasted a few million years; that of homo sapiens will only have lasted a few thousand years, a second in the history of the universe. These considerations are unable to influence the plans and behaviour necessary to tackle the immediate challenges but decision-makers should bear them in mind for the future.

Economic growth and calculating GDP. The political authorities continue to assess people's wellbeing and economic targets in terms of growth in Gross Domestic Product (GDP). An increasing number of economists are, however, recognising that current parameters are invalid and a level of material prosperity and production of goods that is the same as that reached in industrialised countries is untenable for the world as a whole. The Earth's resources will soon be exhausted. The first indispensable reform involves the method of calculating GDP as based on the volume of production and consumption. According to these criteria, if certain diseases are eradicated, hospital activities decline, as will the consumption of medicines, provoking a fall in GDP! The same applies if we succeed in reducing oil consumption and other sources of energy and so forth. The more we consume natural resources (fish, minerals etc.), the more we damage nature (water, air, vegetation) and the more GDP increases and we are pleased about it, while the Earth's resources run out. Fortunately, new calculation methods are making progress; political leaders, including parliamentarians, should take this into account.

The number of car manufacturers should decrease. Every country is currently multiplying its efforts (sometimes at a very high price) to save its “own” auto-industry. This is understandable and is, for the moment, indispensable because this industry has a sometimes decisive impact on economic activity and employment. No-one, however, or practically no-one, would dare to state that the number of firms and producers must inevitably be reduced, now that huge countries like China and India have entered the intensive production stage. We only need look at what the small country of Korea achieved, to imagine what these two giants can do, added to which, at a given moment, will come the others (like Brazil!).

We have to recognise that the quality of cars is currently high almost everywhere. The war involving country against country and company against company will lead to shattering and painful bankruptcies. Firms have to regroup (in part they already have done or are preparing to do so) and their number will inevitably go down. Incentives to buy new cars can have an immediate positive effect but it is unsustainable. When most customers have bought the low consumption and ecological models, they will not be changing it every year. The authorities have to look at this right in the face.

(F.R./trans/rh)

 

Contents

A LOOK BEHIND THE NEWS
THE DAY IN POLITICS
GENERAL NEWS