Authors: Benjamin Barber
The invisible hand thus takes on new significance in the setting of invisible cyberspace, where virtual corporations defeat real nations. Now the space in which they operate is as invisible as the market’s phantom hands. I underscore the importance of these new market hyperrealities here for two reasons: because the free market ideology they rehabilitate is a battering ram against the walls of the nation-state, exposing McWorld’s antagonism to nationalisms of every kind; and because they challenge and ultimately rewrite the traditional account of markets in terms of free trade in raw materials, manufactured goods, and services. For in the economics of McWorld, the traditional dominance of raw materials and goods yields to a novel and distinctive new realm of activity—what I call the infotainment telesector—that redefines the economic realities of McWorld and reorders the relations of nation-states in ways that neither Francis Fukuyama nor Paul Kennedy could anticipate.
T
RADE IN NATURAL
resources and the fruits of the land, whether animal, vegetable, or mineral, is among the oldest and most prosperous and profitable sectors of the economy, dating back to the beginning of economic time. Slave/master societies as well as agricultural and feudal societies were grounded in the discovery, processing, and use of these primary goods. Agriculture and trade in natural resources represents the first rung on the economic ladder, and in the modern economy they have been the Third World’s principal door to development. It is here we find those dozen or so corporations on the southern side of the North/South divide that have clawed their way onto the list of the world’s five hundred largest industrial monoliths.
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Agriculture, the other subsector of the traditional resources category, also dominates the Third World in terms of labor investment (two-thirds of the labor force in many Third World nations work in agriculture), although not, unfortunately for such nations, in terms of production. For First World nations using advanced technology from the information/technology sector can produce goods efficiently while employing only a tiny fraction of their labor force.
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When we compare the percentage of GDP devoted to agriculture to the percentage devoted to goods and services in Third World nations, the First/Third World division is strongly reinforced. Organization for Economic Cooperation and Development (OECD) countries devote on average only 2.8 percent of their GDP to farming, 33 percent to manufacturing, and a whopping 57.6 percent to services while the percentage for agriculture rises to 17.2 percent in Eastern Europe, to 21.8 percent in sub-Saharan Africa, and to 34 percent in south Asia, with a corresponding decline in the service sector to 38.5 percent for Eastern Europe, and to 18 percent for sub-Saharan Africa and south Asia.
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A number of impoverished nations lack not just manufacturing capacity but elementary natural resources and agricultural potential, and are likely to belong in perpetuity to what realistically should be called not the Third World but the Terminal World. Others are “Third World” only on the way to being Second and First World—much in the manner of the United States compared to Britain a couple of centuries ago.
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The bleak prospects of many sub-Saharan countries is epitomized by Ghana. Paul Kennedy has noted that at the beginning of the sixties, it shared a per capita income of a little over $200 with a number of Asian countries, including South Korea. Today, South Korea’s per capita income has increased twelvefold to over $3,000; Ghana’s remains where it was, in the low 200’s.
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Yet the most impressive new truth about natural resources in the era of McWorld is that even here debate about national interest or national independence is increasingly irrelevant. To be sure, economic self-sufficiency has been a dream of all peoples from the outset of their collective histories, especially those with democratic aspirations. Economic dependency meant political servitude internally as well as externally. In classical republican theory from Pericles to Machiavelli and Montesquieu, the free society was the society sufficient unto itself in food and resources. Democrats thus dreamed of utopias whose political autonomy rested firmly on economic independence, what they called autarky. It was not so much the free market but the independent market that would secure freedom for the city-state. However, the Athenians were not able to achieve autarky: human nature, it turns out,
is
dependency, perhaps because human needs and the escalating psychologies by which they are determined are by nature insatiable.
The dream of autarky had a brief reign in nineteenth-century America as well, when the underpopulated, endlessly bountiful land, the cornucopia of natural resources, and the natural barriers of an island continent walled in by two great seas together created a magical interlude in which many could believe that America might actually become a world unto itself. This has imprinted the American mind with an illusory sense of self-sufficiency and has nurtured a spirit of isolationism that has periodically led to a withdrawal from world affairs. For nations, however, no island is ever really an island. And though it has been hard for Americans to accept the inevitability of interdependence, not even our continental cornucopia has been immune to depletion. Elsewhere, the maldistribution of arable soil and mineral resources on an unjustly created planet leaves even the wealthiest societies ever more resource-dependent and relegates many other nations to the permanent despair of the Terminal World.
For nations like Japan and Switzerland, modernized and progressive but resource poor, autarky has never been an option. Either through military dominion over their better-endowed neighbors (Japan’s “Greater East Asian Co-prosperity Sphere,” as its iron-handed pre—World War II empire was known) or extensive trade and prudent foreign policy (Switzerland’s neutrality is the preferred example), such nations have had to forge relationships with others that made a virtue of their dependency. Japan’s military grip on East Asia was a stern discipline for the Japanese too, requiring a large imperial army, permanent occupation, and constant surveillance. Japan’s postwar economic miracle, while it allowed it to reacquire dominion, has made it even more dependent on its trading partners than it once was on its colonies.
Nations whose geography is more promising have fared little better. Potential agricultural behemoths like Russia and India sometimes seem hard-pressed to feed themselves: certainly the Soviet Union failed to do so, compounding the circumstances that sealed its doom. Every nation, it turns out, needs something another nation has. Many nations have almost nothing they need. The erosion of American autarky in natural resources over the last one hundred years stands as an exemplar for dozens of progressive nations, its story more dramatic than most, but finally all too familiar.
As recently as 1960, the United States imported only a handful of minerals such as aluminum, manganese, nickel, and tin. Today we look abroad for zinc, chromium, tungsten, lead, and of course oil. And soon copper, potassium, sulfur, and even iron will become weighty items in our negative balance of trade. Domestic production of coal and shale will take us into the century after next, and the exhaustion of our agriculture will take even more stupidity and incompetence than the economic managers most amply endowed in these qualities are likely to be able to muster. But in most other respects, America—the eighteenth-century’s second Eden and new found land—is looking more and more like Britain or Switzerland, if not Chad or Bangladesh, importing more and more of what it requires to survive.
Less than fifty years ago, there was no aggressor, however bold, that could hope to defeat in battle an America whose supply lines originated in such bounty. From the iron ore and bauxite and phosphate and petroleum reserves came an endless supply of airplane engines and battleships and mortar shells and hand grenades; from the aboriginal fertility of the great plains came food and clothing for as many armies as the nation saw fit to field. Yet by the 1980s the vestiges of this prized autarky were gone and America was as dependent on imports as most of its trading partners. America’s success in World War II had in fact endangered the very resource autarky on which victory rested. The United States drew heavily on its resource banks to acquire global leadership, and would draw even more heavily on them to retain it into the heady years following the war when its relations with the Soviet Union were freezing down at the very moment its domestic economic growth was heating up.
The sharp and sudden deterioration in America’s resource independence produced by this juxtaposition is evident from U.S. bauxite figures. Bauxite is the source of aluminum and a crucial element in industrialization, not least of all in its war-making moment. America was less favorably endowed by nature in bauxite than in other minerals, yet through the end of World War I, America produced nearly 50 percent of the world’s bauxite.
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More important, through 1920 it imported less than 10 percent of its domestic consumption, and at the end of World War II was still producing 57 percent of what it needed.
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Yet within five years (by 1950), imports were up to 65
percent of consumption, with a rapid increase in dependency to 87 percent in 1960, 90 percent in 1980, and 94 percent in 1988.
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Moreover, U.S. bauxite production has continued to plummet as consumption has continued to soar. While in 1945 America was still producing 27 percent of the world’s ore and more than half of what it needed domestically, by 1950 domestic production had dropped to 16 percent of world supply. Ten years later (1960) it was at 7 percent, by 1970 it was half of that (3.4 percent), and in 1989 it was approaching nil—0.5 percent.
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In the fifty years since the end of World War II, then, America has become crucially dependent for the aluminum on which its world leadership is in part based, on the very Third World nations its leadership was meant to subordinate.
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Nearly identical stories can be recounted about other mineral resources as well as about other nations. America’s global rivals, the Common Market and Japan, for example, are 85 to 100 percent dependent on imports for columbium, strontium, manganese, cobalt, tantalum, platinum, chromium, nickel, tin, antimony, iron ore, gold, copper, molybdenum, and phosphate.
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Like America, Europe increasingly depends on potential adversaries for the strategic metals on which its military capacity to confront such adversaries depends.
Although new discoveries of copper, lead, and zinc (as well as aluminum) increased overall world reserves faster than world consumption reduced them through the 1980s, the patterns of production, refining, and distribution have increased dependency for all nations involved in the process—particularly for those like France, Russia, and America that once enjoyed the illusion of autarky. Moreover, as the developable (non-Terminal) Third World evinces a growing First World appetite for consumption to fuel its developing industrialization, global consumption is clearly going to outstrip global production by ever greater margins, increasing the urgency of resource dependency and bringing Malthusian imperatives into dramatic play once again: who will get how much of a vanishing supply of irreplaceable resources? Will China really pursue an automotive economy for everyman as it proposed it would do in 1994? A billion more cars will do in China’s independence as surely as it will exhaust global mineral and fossil fuel supplies (not to mention the environment). If the Chinese were to drive as many per capita passenger
miles as Americans currently do each year, it would take only five years to use up all the earth’s known energy reserves.
Technology will of course continue to do battle with nature in the endless clash of hope and despair that defines human life. Manufacturers have found replacements for ozone-layer-damaging propellants and introduced them with such alacrity—outstripping legislated requirements—that estimates of damage are now being gratefully revised downwards. Government manipulation of market incentives can make a difference. In the domain of minerals, technological innovation in recycling suggests a strategy that can mitigate both resource depletion and the dependency it produces. In 1987, waste stockpiles from American mining, mineral processing, and metallurgical industries were estimated at almost 2 billion tons, and while the varying mineral content of such wastes makes recycling expensive, we are nevertheless doing more and more of it.
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The environmental savings are considerable: the amount of energy required to produce a ton of a given metal by mining, extraction, and refining is anywhere from double to tenfold the energy required to produce the same ton from recycling. Reusing things may not do much for corporate profits but it spares mother earth and leaves more for the generations still to come.
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In the brave new epoch of McWorld, we may yet find a way to refashion our garbage into liberty and wring from our waste products a semblance of our lost independence.
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Technology also holds out the promise of a new age alchemy: contriving from synthetics strange new substitutes for natural metals that eliminate dependency on natural resources while improving performance. It also promises new ways of getting to and processing mineral resources once too low-grade or too far underground or undersea to warrant recovery.
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The Pacific floor is strewn with manganese nodules—a wealth of small nuggets that contain far more cobalt, nickel, and copper than all the world’s known land reserves. They are currently at depths where their recovery is unfeasible but the science of submersibles marches on while robotic vacuums capable of sucking up the treasure are already on the drawing board.
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Yet ultimately, even where technology offsets resource depletion through new discovery techniques and more economical extraction methods or through recycling and substitution, the long-term trends spell ineluctable interdependence for just about everyone in just
about everything. Promethean hope may ultimately overcome Malthusian doubt, but Prometheus’s theft of technology’s fire can be exploited only through collaboration. Science and technology, like Prometheus, cannot be bounded: not by frontiers, not by national sovereignty. They are made possible by cooperation and they command interdependence. The world’s nations, having exhausted their natural bounty one by one, may still find a way to survive on the wings of artifice, but they will do so interdependently and together: globally or not at all. The nation-state’s days are numbered.