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Growing the economy to help the poor and other myths January 29, 2008

Posted by Andreas in "The Economy", activism, Climate change, Environment, Global warming, Politics, Society, South Africa.

I’ve been reading the 2007 groundWork report, which is entitled Peak Poison: The elite energy crisis and environmental justice. It’s a brilliant synthesis of our current and future energy predicament from an environmental justice perspective and can be downloaded from the groundWork website here – recommended reading!

Here are some interesting extracts:

The central idea of accumulation – that profits must be accumulated and reinvested to make more profits – is the basis of economic growth which is assumed to be a self-evident good. Just as the first priority of every private corporation is to make profit, so the first priority of every government is to ‘grow the economy’.

The poor provide the justification for economic growth which is supposed to ‘lift’ people out of poverty by creating more jobs. To do this the economy must be internationally competitive, which requires increased ‘labour productivity’, which means more capital (like machinery) employed per worker, which means that fewer workers are needed. South Africa’s recent history shows a strong relationship between capital investment and workers redundancy.

The poor provide legitimacy. With more or less sincerity, alleviating poverty is written into the mission statements of institutions as diverse as the World Bank, international aid agencies and NGOs as well as corporate social responsibility programmes. Ending poverty is an indispensable plank in political election platforms, central to the rhetoric of governments and a core justification for the state [and, of course, economic ‘growth’] as such.

Cheap energy for the capital and energy intensive industries at the heart of South Africa’s minerals and energy complex remains central to the state’s strategy for growth in the ‘first economy’ and to Eskom’s […] growth strategy. Major expansions are either planned or in progress in the Mpumalanga platinum mines, at the Hillside and Mozal aluminium smelters, at Columbus Steel and Mittal, and at Sasol, while Indian conglomerate Tata has started construction on a high-carbon ferrochrome plant at Richards Bay. In each case the corporations will be haggling over the electricity price and seeking to ensure that increases […] will be laid at someone else’s door. And the net result will be to lock in carbon intensive economic growth for the next twenty years and more [my emphasis].



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