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Geopolitics and the Limits of Growth

Will capitalist, neo-liberal ideals survive global resource-scarcity in the next century?

March 17, 2004

Will capitalist, neo-liberal ideals survive global resource-scarcity in the next century?

The economic theory that underpins the global free market ultimately rejects the very idea of resource scarcity.

If demand exceeds supply, resources will become expensive. As a result, new supplies will be found — or technological alternatives developed.

In this view, so long as market pricing is in place and technological innovation continues, economic growth cannot be derailed by scarcity. For all practical purposes, natural resources are infinite.

The idea that human invention can overcome natural scarcity is not new. The Positivists believed that industrialization would enable humanity to conquer scarcity.

Following them in this faith, Karl Marx — the philosopher who originated the notion of communism — imagined that industrialism would make possible a condition of abundance in which, in turn, both markets and the state would become obsolete.

And before Marx, the belief that human ingenuity could overcome scarcity had long been a mainstay of utopian thought.

For example, Charles Fourier — the early 19th century French utopian thinker — is reputed to have believed that a time would come when the oceans would be made of lemonade.

His prognostications were no more far-fetched than those of late 20th century free-market economists.

Like Marxists, neoliberals imagine that with the triumph of industrialization, there will be no more wars of scarcity.

In that sense, America's neoliberal missionaries ironically embraced the weakest aspects of Marx's thought. They emulated his historical determinism — but lacked his Homeric vision of historical conflict.

Karl Marx, after all, knew that capitalism is endemically unstable. In contrast, his American followers imagined it had reached an equilibrium that would last forever.

Marx perceived that capitalism was destroying bourgeois life. His American "disciples" were confident that bourgeois life would soon be universal.

Either way, the sub-Marxian, neoliberal worldview that shaped U.S. policies in the 1990s could not last. Well before the terrorist attacks of 9/11, the United States was losing interest in globalization.

Later, when President Bush imposed tariffs on steel and farm products, it became clear that maintaining the global free market was no longer a priority. It is probably only a matter of time before the United States thumbs its nose at the World Trade Organization.

In that event, trade will return to being a matter of bilateral negotiations among governments and blocs. The international system will revert to being a society of sovereign states.

Back in the 1970s, it was the Club of Rome that argued that finite natural resources could not support exponentially rising population and production. Despite all its impressive findings, its report failed to dent the faith that industrial societies had discovered the secret of perpetual growth.

History outran the prescience of economists. By the 1990s, resource scarcity had become a source of war. The Gulf War was waged to prevent Kuwaiti and Saudi oil supplies falling out of western control. A decade later, control of energy supplies dominates strategic thinking.

The limits to growth have not disappeared. They have returned as geopolitics.

21st century wars will be resource wars, made more dangerous and intractable by being intertwined with ethnic and religious enmities.

Lest we forget, rivalry for scarce natural resources played a central role in the 20th century's largest wars. Competition for oil supplies was a formative influence on the Second World War.

A U.S. embargo on oil exports to Japan was the deciding factor in tipping the balance of opinion in the Japanese military in favor of war. The prospect of seizing Soviet oil production facilities was a major factor in Hitler's decision to invade Russia in 1941.

If history is any guide, the coming century will be punctuated by oil wars.

Behind intensifying rivalries for natural resources are increasing human numbers. Continued population growth worldwide increases the human impact on the planet as a whole. The result is increasing geopolitical conflict.

When the necessities of life are at stake, humans will not wait for technical innovation or the market to operate. They will demand — and obtain — political action.

We do well to remember that the price mechanism is a creature of state power. It operates only so long as the state is intact. When scarcity amounts to a threat to subsistence, market pricing breaks down. The state becomes an instrument of rationing or conquest.

Increasing resource scarcity would be dangerous even if the global environment were stable. As a matter of fact, though, it is increasingly unstable. The geopolitical risks of resource scarcity are being aggravated by climate change.

Over the coming century, global warming may well overtake scarcity in energy supplies as a source of geopolitical conflict.

In some areas, it means desertification — in others flood. Food production is likely to be disrupted.

Ultimately, globalization begets de-globalization.

By intensifying competition for natural resources and hastening the spread of weapons of mass destruction, the dissemination of new technology throughout the world magnifies some of the most dangerous human conflicts.

Neoliberal utopians expected that globalization would fill the world with liberal republics, linked together in peace and trade. As it appears, history is responding with a flowering of war, tyranny — and empire.

Excerpted from John Gray's "Al Qaeda and What It Means to Be Modern." Copyright © 2003 John Gray. Used by permission of The New Press.