Thursday, January 24, 2008

The Growth Illusion

Yesterday, I decided to climb out on one of those shaky limbs of conventional wisdom by asking "What is so important about growth that it should be the only criteria invoked for assessing economic health?" This morning Al Jazeera English added fuel to my fire by running two stories, both compiled from their wire services, within three hours of each other. Taken together they provide an interesting context for examining my question.

Here is the lead from the earlier story, released at 4:20 GMT:

China's economy continued to surge ahead in 2007, recording its fastest growth in 13 years with only a small slowdown in the final quarter of the year, leading officials to warn that overheating remains a danger.

The latest figures released among a slew of economic data on Thursday put growth at 11.4 per cent for 2007 – the fifth year in a row that growth has topped 10 per cent.

There you have it: China, the "leading engine of global economic growth," as Condoleeza Rice put it when she addressed the World Economic Forum yesterday in Davos. What, then, indicates the quality of life brought on by such a "leading engine of global economic growth?" One answer may be found in the subsequent story, which Al Jazeera English released at 7:38 GMT:

China is facing its worst-ever power shortage as winter weather puts pressure on dwindling coal supplies.

Officials say reserves are down to emergency levels with only enough coal to power the entire country for another eight days.

According to state media the shortage amounts to nearly 70 gigawatts, equivalent to about the entire generating capacity of the United Kingdom.

Across China 13 provinces including the southern industrial and export hub of Guangdong, have already begun rationing supplies, tiggering brown-outs across large areas.

That's right, a "leading engine of global economic growth," the sort that, according to Rice, sets the bar for our own economic performance, cannot even supply adequate electrical power to thirteen of its provinces. Those of us who enjoy the ironies of life will probably appreciate that one of those provinces if Guangdong, which, just to stretch the metaphor, many would regard as the massive boiler that powers that "engine of global economic growth!"

The moral behind yesterday's rant was that our priorities have gone dangerously out of whack. Since I tried to make this point by invoking the Preamble of our Constitution, by "our priorities" I meant the priorities of the United States; but this little narrative that emerges from the accidental juxtaposition of two news reports from China simply underscores that these are global priorities. This then raises the question of the week: If they really are global priorities, are they priorities on the agenda of the World Economic Forum? My guess is that they are not, not only because Rice's opening address rode roughshod over them but also because, as I also reported yesterday, the CEO of AT&T does not appear to give a tinker's damn about them either. This is not to say that those willing to think about such global priorities have been "banned from Davos;" but they probably have as much trouble being heard as Dennis Kucinich at a Democratic debate. Indeed, for all the honorable things that Bono has been trying to do, often to positive effect, one has to wonder whether his own presence in Davos is some cross between tokenism and entertainment value. The real lesson from Davos is that when governments and businesses speak with the same voice, then all other voices are reduced to insignificance; and all the rest of us get out of it is the opportunity to watch our ruling class dine on their own cheap talk, served on silver platters at tables covered with the finest damask linen.

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