by Dr. J.W. Smith
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At the close of the Cold War, the United States had $21 trillion worth of reproducible social capital and $1 trillion worth of industrial capital (1990 dollars). Subtracting military and other wasted industry leaves a ratio of approximately one unit of civilian industrial capital to thirty units of social capital. At that ratio, the developed world would only have to provide to the developing world one-thirtieth their needed wealth, those all-important industrial tools with which they would produce their social capital.
Since only 70 percent of U.S. industrial capacity is producing for consumer needs and the world sustainable development level is 20 percent that of the U.S. throwaway economy, rational planning would consider industrializing the developing world to 14 percent of the U.S. level. As in a balanced economy only 3.3 percent of a developed society's wealth is industrial capital producing for the civilian economy, the developing world would still have to build the remaining 96.7 percent of wealth that is social capital. That the total world industrial capital in this development model equals the current world industrial level redistributed testifies to the validity of this thesis.
These goals are reachable. Increased efficiencies of technology will eventually be able to produce several times as much benefit from each unit of energy, water, materials, or anything else borrowed from the planet and consumed.
That roughly 20 percent of the world's population (1996) has attained the living standard of America's throwaway economy and another 40 percent the living standard of a bicycle/mass transit economy, again testifies to the feasibility of this thesis. The 60 percent of the world currently above poverty need only turn their minds to a nonthrowaway, but quality, lifestyle and the remaining 40 percent of the world only needs the industrial technology and training to produce that same quality lifestyle.
The developing world and the developed world together have spent about $17 trillion on arms (converted to 1990 dollars) since World War II. That is five times enough to have industrialized the developing world to a sustainable level over the past forty-five years. When one considers the social capital destroyed by 127 wars the past 55 years, the loss to the world due to arms production is even greater.
The wealth wasted and destroyed in World War II could have developed the world many times over. Western Europe has allied together specificly to increase economic efficiency and prevent wars. This is what we are proposing for the undeveloped world.
Capitalizing the world would have been a much simpler job than waging all those wars, to say nothing of eliminating the reason for them. After all, under democratic/cooperative capitalism, as opposed to pseudo-democratic neo-mercantilist corporate imperialism, there would have been the cooperation of those societies instead of their battles attempting to gain or retain their economic freedom.
Using these industrial tools, and with production compounding (this is what compounding interest is supposed to do), developing nations could have built their own social capital. The history of the last seventy-five years could then have been one of world peace, prosperity, and care for the soil, water, and air, instead of intrigues, trade wars, covert wars, cold wars, hot wars, dispossessions, poverty, and ecological destruction.
We have calculated that a society can be well cared for at 20 percent of the American consumption rate, or with as little as 14 percent of U.S. per capita industrial capacity at the peak of the Cold War. As of that date (1990), the value of industrial tools stood at about $5,600 per person in the United States. (Homes, cars, roads, bridges, electric power, water systems, sewers, etc., are social capital. Steel mills, factories, and so forth are industrial tools.) By the above calculation, one would consider 14 percent of that-or under $900 industrial capacity per person-as adequate for an efficient, peaceful society. Allowing 3.5 billion people without modern tools, $3.15 trillion of industrial capital (1990 dollars) is needed to develop the world to a sustainable level.
Assuming it would require forty-five years for the developing world to be educated and to build social capital as it was being given industrial capital, and assuming a doubling of the developing world's population in that time span, it would require $6.3 trillion. That larger figure would be only $140 billion annually, or 14 percent of the $1 trillion spent on arms worldwide in 1990.
Modern industries can spit out industrial tools just as fast as they can cars, refrigerators, airplanes, tanks, guns, or warships. (In all those unneeded tanks, guns, and warships there is likely enough steel to produce the necessary industrial tools.) Since capital reproduces its value every ten months, if one forty-fifth of the required industrial capital were installed each year and used by the developing world to build social capital, by the forty-fifth year of this mutual support policy of democratic/cooperative capitalism, the entire world would be industrially and socially capitalized to a level that would provide a secure lifestyle for most of the world's citizens and within the capacity of the earth's resources and its ability to absorb waste.
If it is so simple, why is it not done? Because the monopolization of the tools of production keeps these tools and the immense wealth they could produce in the hands of the powerful and already wealthy. Each imperial-center-of-capital must defend its ownership of capital or lose the high profits and high wages with which it purchases cheaply the resources of those without capital, and with which it trades equally with allied imperial-centers-of-capital. To share capital, technology, resources, and markets is to eliminate one's advantage.
Eliminate that waste of resources and labor outlined in this chapter, provide others with modern tools of production so they can produce for their needs, provide security through disarmament and security guarantees rather than arms, manage trade between regions, reduce those protections in step with increased industrial efficiency and labor skills, reduce populations to within the regional capacity for a sustainable quality lifestyle, and the world quality of life can rise rapidly.
Underdeveloped countries could not absorb those tools as fast as they could be built. Thus, we are considering using only roughly 28 percent of the West's industry formerly dedicated to arms production. This is, however, only a broad overview. It is not meant to outline either the exact methods or timetable for implementation. If engineers are authorized to proceed and are given access to productive capital, they can easily solve these problems. It is reasonable to assume that it is possible for the developing world to train workers, absorb this industrial capital, build the infrastructure (businesses, homes, roads, sewers, water, electricity, etc.), and produce the necessary social capital over a period of forty-five years.
The only way the impoverished world can gain full and equal rights as we are outlining is if they ally together. Inform your friends, form your discussion groups. People are good. Prove to philosophers and negotiators in the wealthy world that poverty can be relatively quickly eliminated and many will recognize they have been misinformed and support you.