The Political Functions of Economic Growth
From our earliest colonial beginnings, rising expectations have been a fundamental part of the American credo, each generation expecting to become richer than the previous one. Thanks to this expectation of growth, the class conflict and social discontent typical of early nineteenth-century Europe were all but absent in America; politics was accordingly undemanding, pragmatic, and laissez-faire. Thus, said Alexis de Tocqueville in his classic study of American civilization Democracy in America, we were indeed a "happy republic."
Growth is still central to American politics. In fact, it matters more than ever, for the older social restraints (the Protestant ethic, deference, isolation) have all been swept away Growth is the secular religion of American society, providing a social goal, a basis for political solidarity, and a source of individual motivation. The pursuit of happiness has come to be defined almost exclusively in material terms, and the entire society—individuals, enterprises, the government itself—has an enormous vested interest in the continuation of growth.
The Economic Basis of Pragmatic Politics
Growth continues to be essential to the characteristic pragmatic, laissez-faire style of American politics, which has always revolved around the question of fair access to the opportunity to get on financially. Indeed, American political history is but the record of a more or less amicable squabble over the division of the spoils of a growing economy. Even social problems have been handled by substituting economic growth for political principle, transforming non-economic issues into ones that could be solved by economic bargaining. For example, when labor pressed its class demands, the response was to legitimize its status as a bargaining unit in the division of the spoils. Once labor had to be bargained with in good businesslike fashion, compromise, in terms of wages and other costable benefits, became possible. In return for labor's abandonment of uncompromising demands for socialism, others at the economic trough "squeezed over" enough for labor to get its share. Similarly, new political demands by immigrants, farmers, and so on were bought off by the opportunity to share in the fruits of economic growth. The only conflict that we failed to solve in this manner was slavery and its aftermath, and it is typical that once the legitimacy of black demands was recognized in the 1960s, the reflex response was to promote economic opportunity via job training, education, "black capitalism," and fair hiring practices—that is, the wherewithal to share the affluence of the envied whites. If blacks prosper economically, says our intuitive understanding of politics, racial problems will vanish.
As a political mode, economic reductionism has many virtues. Above all, it is a superb means of channeling and controlling social conflict. Economic bargaining is a matter of a litde more or a litde less. Nobody loses on issues of principle, and even failure to get what you want today is tolerable, for the bargaining session is continuous, and the outcome of the next round may be more favorable. Besides, everybody's share is growing, so that even an unfair share is a more-than-acceptable bird in the hand. Most people understand that in a growth economy, individuals or groups have more to gain from increases in the size of the enterprise as a whole than from any feasible change in distribution. Furthermore, people have gotten what was of primary interest to them—access to income and wealth—and with their chief aim satisfied, they were able to repress desires for community, social respect, political power, and other values that are not so easily divisible as money.
This characteristic style of conflict resolution presupposes agreement on the primacy of economics and a general willingness to be pragmatic and to accept the bargaining approach to political and social as well as economic issues. Unfortunately, the arrival of ecological scarcity places issues on the political agenda that are not easily compromisable or commensurable, least of all in terms of money. Trade-offs are possible, of course, but environmental imperatives are basically matters of principle that cannot be bargained away in an economic fashion. Environmental management is therefore a role for which our political institutions are miscast, because it involves deciding issues of principle in favor of one side or another rather than merely allocating shares in the spoils. Worse, a cessation or even a slowing of growth will bring opposing interests into increasingly stark conflict. Economic growth has made it possible to satisfy the demands of new claimants to the spoils without taking anything away from others. Without significant growth, however, we are left with a zero-sum game, in which there will be winners and losers instead of big winners and little winners. Especially in recent years, growth has become an all-purpose "political solvent", satisfying rapidly rising expectations while allowing very large expenditures for social welfare and defense. Without the political solvent of growth to provide quasi-automatic solutions to many of our domestic social problems, our political institutions will be called on to make hard choices about how best to use relatively scarce resources to meet a plethora of demands. More important, long-suppressed social issues can now be expected to surface— especially the issue of equality.
Ecological Scarcity versus Economic Justice
To state the problem succinctly, growth and economic opportunity have been substitutes for equality of income and wealth. We have justified large differences in income and wealth on the grounds that they promote growth and that all members of society would receive future advantage from current inequality as the benefits of development "trickled down" to the poor. (On a more personal level, economic growth also ratifies the ethics of individual self-seeking: You can get on without concern for the fate of others, for they are presumably getting on too, even if not so well as you.) But if growth in production is no longer of overriding importance, the rationale for differential rewards gets thinner, and with a cessation of growth it virtually disappears. In general, anything that diminishes growth and opportunity abridges the customary substitutes for equality. Because people's demands for economic betterment are not likely to disappear, once the pie stops growing fast enough to accommodate their needs, they will begin making demands for redistribution.
Even more serious than the frustration of rising expectations is the prospect of actual deprivation as substantial numbers of people get worse off in terms of real income as a result of scarcity-induced inflation and the internalization of environmental costs. Indeed, the eventual consequence of ecological scarcity is a lower standard of living, as we currently define it, for almost all members of society. One does not need a gloomy view of human nature to realize that this will create enormous political and social tension. It is, in fact, the classic prescription for revolution. At the very least, we can expect that our politics will come to be dominated by resentment and envy—or "emulation," to use the old word—just as it has many times in the past in democratic polities.
To make the revolutionary potential of the politics of emulation more concrete, let us imagine that the current trend toward making automobile ownership and operation more expensive continues to the point where the car becomes once again a luxury item, available only to "the carriage trade." How will the average person, once an economic aristocrat with his or her own private carriage but now demoted to a scooter or a bicycle, react to this deprivation, especially in view of the fact that the remaining aristocrats will presumably continue to enjoy their private carriages?
Of course, such an extreme situation is probably a long way off (although many would be priced out of the market today if all the social costs attributable to the automobile were internalized). Yet it is toward such a situation that the rising costs due to ecological scarcity are pushing us. Already, in striking contrast to the not-too-distant past, the price of a detached house in the most populous areas of the country is more than the average family can afford to pay. Also, as the cost of food and other basic necessities continues to increase, less disposable income will be left for the purchase of automobiles and other highly desired goods. In sum, deprivation is inevitable, even in the short term.
This point has not been lost on advocates for the disadvantaged, who have already protested vehemently against the regressive impact of even modest increases in the cost of energy (through increased gasoline taxes, for example) and goods*. More generally, they fear that lessened growth will tend to restrict social mobility and freeze the status quo, or even turn the clock back in some areas, such as minority rights.
The political stage is set, therefore, for a showdown between the claims of ecological scarcity on the one hand and socioeconomic justice on the other. If the impact of scarcity is distributed in a laissez-faire fashion, the result will be to intensify existing inequalities. Large-scale redistribution, however, is almost totally foreign to our political machinery, which was designed for a growth economy and which has used economic surplus as the coin of social and political payoff. Thus the political measures necessary to redistributing income and wealth such that scarce commodities are to a large degree equally shared will require much greater social cooperation and solidarity than the system has exhibited in the past. They will also require greater social control. Under conditions of scarcity, there is a trade-off between freedom and equality, with perfect equality necessitating almost total social control (as was attempted in Maoist China). However, even partial redistribution will involve wholesale government intervention in the economy and major transfers of property rights, as well as other infringements of liberty in general, that will be resisted bitterly by important and powerful interests.
Thus either horn of the dilemma—laissez faire or redistribution— would toss us into serious difficulties that would strain our meager political and moral resources to or beyond capacity. American society is founded on competition rather than cooperation, and scarcity is likely to aggravate rather than ameliorate the competitive struggle to gain economic benefits for oneself or one's group. Similarly, our political ethic is based on a just division of the spoils, defined almost purely in terms of fair access to the increments of growth; once the spoils of abundance are gone, little is left to promote social cooperation and sharing. As Adam Smith pointed out, the "progressive state" is "cheerful" and "hearty"; by contrast, the stationary state is "hard," the declining state "miserable" . How well will a set of political institutions completely predicated on abundance and molded by over 200 years of continuous growth cope with the "hardness" of ecological scarcity?
The Non-politics of Due Process
This dilemma is only a specific instance of a more general problem. In many areas, the American government will be obliged to have genuine policies—that is, specific measures or programs designed to further some particular conception of the public interest. This will require radical changes, because in our laissez-faire political system, ends are subordinated to political means. In other words, we practice "process" politics as opposed to "systems" politics. As the name implies, process politics emphasizes the adequacy and fairness of the rules governing the process of politics. If the process is fair, then, as in a trial conducted according to due process, the outcome is assumed to be just—or at least the best that the system can achieve. By contrast, systems politics is concerned primarily with desired outcomes; means are subordinated to predetermined ends.
The process model has many virtues. Keeping the question of ends out of politics gready diminishes the intensity of social conflict. People debate the fairness of the rules, a matter about which they find it relatively easy to agree, and they do not confront each other with value demands, which may not be susceptible to compromise. However, by some standards, the process model hardly deserves the name of politics, for it evades the whole issue of the common interest simply by declaring that the "will of all" and the "general will" are identical. The common interest is thus, by definition, whatever the political system's invisible hand cranks out, for good or ill.
Of course, we have found that pure laissez-faire politics, like pure laissez-faire economics, produces outcomes that we find intolerable, but our instinct has always been to curb the social costs of laissez faire by reforms designed to preserve its basic features: We check practices that prevent the efficient or fair operation of the market rather than converting to a planned economy; we promote equal opportunity rather than redistributing wealth or income. Planning with certain ends in mind does take place in such a political system. Each separate atom or molecule in the body politic (individuals, corporations, government agencies, advisory commissions, and supreme courts) plans in order to maximize its own ends, and the invisible hand produces the aggregated result of action on these private plans. But the central government does not plan in any systematic way, even though its ad hoc actions—VA and FHA home loans, tax breaks for homeowners, and the like—do in a sense constitute a "plan" for certain outcomes—in this case, suburban sprawl.
In reality, "the American political system" is almost a misnomer. What we really have is congeries of unintegrated and competitive subsystems pursuing conflicting ends—a non-system. And our overall policy of accepting the outcome of due process means that in most particulars we have non-policies. Now, however, just as in economics, the externalities produced by this laissez-faire system of non-politics have become unacceptable. Coping with the consequences of ecological scarcity will require explicit, outcome-oriented political decisions taken in the name of some conception of an ecological, if not a political and social, common interest. What likelihood is there of this happening?
Who Dominates the Political Marketplace?
Critics of the American political system almost never question the necessity (or superiority) of process politics. If bad outcomes are generated, it must be because powerful interests dominate the political marketplace and prevent the will of the majority from being fully and fairly translated into outcomes. There has been, say the critics, a wholesale expropriation of the public domain by private interests (Lowi 1969; McConnell 1966). Nevertheless, although much of this criticism is incontrovertible, the general preferences of the American people are in fact quite well reflected in political output. People want jobs, economic opportunities, and a growing economy. Indeed, to the extent that the system has had a guiding policy goal at all, it has been precisely to satisfy the rising expectations of its citizens. Even if special interests have benefited disproportionately from the measures taken to promote this end, most of the benefit has been transmitted to the vast majority of the population. The problem, then, is not that our political institutions are unresponsive to our wills but that what we desire generates the tragedy of the commons.
Naturally, to the extent that our government is largely a brokerage house for special interests, the situation is much worse, because such interests have an even bigger stake in continued economic growth. But within a process system of politics, government decisions that consistently favor producer over consumer interests are all but inevitable, for the political marketplace is subject to the public-goods problem. For example, those who have a direct and substantial financial interest in legislation and regulation are strongly motivated to organize, lobby, make campaign contributions, advertise, litigate, and so forth in pursuit of their interests. By comparison, the great mass of the people, who will be indirectly affected and whose personal stake in the outcome is likely to be negligible, have very little incentive to organize in defense of their interests. After all, the "right" decision may be worth $10 million to General Motors but will cost each individual only a few pennies. Thus those who try to stand up to special interests on environmental issues find themselves up against superior political resources all across the board.
The gross political inequality of profit and nonprofit interests is epitomized by the favorable tax treatment accorded the former. By law, tax-deductible donations cannot be used for lobbying or other attempts to influence legislation (for example, by advertising). Thus the nonprofit organizations that depend very heavily on donations are severely handicapped; if they lobby, they undercut their financial support. Businesses, by contrast, can deduuct any money spent for the same purpose from their taxable income and pass on the remaining expense in the form of higher prices. The public, both as consumers and as taxpayers, therefore subsidizes one side in environmental disputes. Moreover, the law is self-protecting, for public-interest groups cannot even lobby to have it changed without losing their tax-exempt status.
Thus the outcome of the process of American politics faithfully reflects the will of the people and their desire for economic growth. However, just as in the economic marketplace, the public suffers from certain negative externalities as a result of the inordinate political power of producer interests; political power tends to be used to ratify and reinforce, rather than countermand, the decisions of the economic market. In sum, the American political system has all the drawbacks of laissez faire, wherein individual decisions add up to an ecologically destructive macro-decision, as well as a structural bias in favor of producers that tends to make this macro-decision even more destructive of the commons than it would otherwise be.
The Ecological Vices of Muddling Through
The logic of the commons is enshrined in a system of process politics obedient to the demands of both consumer and producer for economic growth. The ecological vices of this system are further intensified by the decision-making style characteristic of all our institutions—disjointed incrementalism or, to use the more honest and descriptive colloquial term, "muddling through."
Incremental decision making largely ignores long-term goals; it focuses on the problem immediately at hand and tries to find the solution that is most congruent with the status quo. It is thus characterized by comparison and evaluation of marginal changes (increments) in current policies, not radical departures from them; by consideration of only a restricted number of policy alternatives (and of only a few of the important consequences for any given alternative); by the adjustment of ends to means and to what is "feasible" and "realistic"; by serial or piecemeal treatment of problems; and by a remedial orientation in which policies are designed to cure obvious immediate ills rather than to bring about some desired future state. Moreover, analysis of policy alternatives is not disinterested, for it is carried out largely by partisan actors who are trying to improve their bargaining position with other partisan actors.
Muddling through is therefore a highly economic style of decision making that is well adapted to a pragmatic, laissez-faire system of politics. Moreover, it has considerable virtues. Like the market itself, disjointed incrementalism promotes short-term stability by minimizing serious conflict over ultimate ends, by giving everybody something of what they want, and by bringing bargained compromises among political actors, satisfying their needs reasonably well at minimumal intellectual and financial cost. At the same time, it promotes the consensus and legitimacy needed to support public policy. It is also basically democratic; like the economic market, it reflects the preferences of those who participate in the political market (assuming that all legitimate interests can participate equally, which is not always the case). Disjointed incrementalism is also conservative in a good sense: It does not slight traditional values, it encourages appreciation of the costs of change, and it prevents overly hasty action on complex issues. It may also avoid serious or irreversible mistakes, for an incremental measure that turns out to be mistaken can usually be corrected before major harm has been done. Under ideal circumstances, disjointed incrementalism therefore produces a succession of policy measures that take the system step by step toward the policy outcome that best reflects the interests of the participants in the political market.
Unfortunately, muddling through has some equally large vices. For example, it does not guarantee that all relevant values will be taken into account, and it is likely to overlook excellent policies not suggested by past experience. In addition, disjointed incrementalism is not well adapted to handling profound value conflicts, revolutions, crises, grand opportunities, and the like—in other words, any situation in which simple continuation of past policies is not an appropriate response. Most important, because decisions are made on the basis of immediate self-interest, muddling through is almost guaranteed to produce policies that will generate the tragedy of the commons. It is perfectly possible to come up with a series of decisions that all seem eminently reasonable on the basis of short-term calculation of costs and benefits and that satisfy current preferences but that yield unsatisfactory results in the long run, especially because the future is likely to b'e discounted in the calculation of costs and benefits. In fact, that is just how we have gotten ourselves into an ecological predicament. Thus the short-term adjustment and stability achieved by muddling through is likely to be achieved at the expense of long-term stability and welfare.
A perfect illustration of the potential dangers of muddling through is our approach to global warming. As a result of millions of separate decisions made by industry and individuals, 6 billion tons of carbon dioxide are emitted into the atmosphere each year, and emissions are increasing by 3% annually. Yet no real congressional debate has occurred on whether to control these private decisions in order to reduce carbon emissions. Even worse, the executive branch blithely ignores the problem and advocates a more aggressive pursuit of the traditional energy and growth policies that have brought about the rise in carbon dioxide emissions. As a result, we go on unwittingly pursuing business as usual, making short-term calculations of costs and benefits, and bring upon ourselves the greenhouse effect almost by default.
Indeed, in its purest form, muddling through is policy making by default instead of by conscious choice—simply an administrative device for aggregating individual preferences into a "will of all" that may bear almost no resemblance to the "general will." Unfortunately, the contrasting synoptic, or outcome-oriented, style of decision making cannot be fully achieved in the real world because of limits to our intellectual capacities (even with computers), lack of information (plus the cost of remedying it), uncertainty about our values and conflicts between them, and time constraints, as well as many lesser factors. Moreover, in its pure form, synoptic decision making could lead to irreversible and disastrous blunders, obliviousness to people's values, and the destruction of political consensus. Thus some measure of muddling through is a simple administrative necessity in any political system.
However, we Americans have taken muddling through, along with laissez faire and other prominent features of our political system, to an extreme. We have made compromise and short-term adjustment into ends instead of means, have failed to give even cursory consideration to the future consequences of present acts, and have neglected even to try to relate current policy choices to some kind of long-term goal. Worse, we have taken the radical position that there can be no common interest beyond what muddling through produces. In brief, we have elevated what is an undeniable administrative necessity into a philosophy of government, becoming in the process an "adhocracy" virtually oblivious to the implications of our governmental acts and politically adrift in the dangerous waters of ecological scarcity.
Disjointed incrementalism, then, provides an almost sufficient explanation of how we have proceeded step by step into the midst of ecological crisis and of why we are not meeting its challenges at present. As a normative philosophy of government, it is a program for ecological catastrophe; as an entrenched reality with which the environmental reformer must cope, it is a cause for deep pessimism. At the very least, the lever or quality of muddling through must be greatly upgraded, so that ecology and the future are given due weight in policy making. But goal-oriented muddling through comes close to being a contradiction in terms (especially within a basically democratic system). Moreover, incrementalism is adapted to status-quo, consensus politics, not to situations in which policy outcomes are of critical importance or in which the paradigm of politics itself may be undergoing radical change. Thus steering a middle course will be difficult at best, and it may not be possible at all during the transition to a steady-state society.
* For every $1.00 increase in the price of oil, about 78,000 jobs are lost in the United States. Yet if the gasoline tax were adjusted to pay the cost of all public subsidies to the automobile, Americans would have to pay $4.50 per gallon of gas.
-pp. 237-46, Ecology and the Politics of Scarcity Revisited, William Ophuls & A. Stephen Boyan, Jr.