At a two-day forum conducted by Resources for the Future in 1971, papers were presented as the basis for discussion of the apparent conflict emerging between two societal objectives: providing energy to meet the needs of future economic growth and protecting the quality of the natural environment. The excerpts in this issue are taken from four of the eight papers, all of which are being published for RFF next month by The John Hopkins University Press in a book edited by Sam H. Schurr, entitled Energy, Economic Growth, and the Environment.
Even with the aid of a rise of 55 percent in GNP and 34 percent in real per capita personal income from 1959 to 1969, we have found in the United States that our inroads on social problems have not kept pace with our rising expectations and aspirations. Imagine the tensions between rich and poor, between black and white, between blue-collar and white-collar workers, between old and young, if we had been forced to finance even the minimal demands of the disadvantaged out of a no-growth national income instead of a one-third increase in that income.
A specific example may be instructive. Between 1959 and 1969 the number of persons below the poverty line fell from 39 million to 24 million, from 22.4 percent to 12.2 percent of a rising population. The improvement came from a 3 percent increase in productivity per year, a drop in unemployment from 6 percent 4 percent, shifts of the poor from lower to higher income occupations and regions, and an extraordinary growth in government cash transfers, from $26 billion in 1960 to over $50 billion in 1970. Every one of these factors was in some way the direct outgrowth of, or was associated with or facilitated by, per capita economic growth. Given their huge stake in growth as a source of the wherewithal and much of the will to improve their lot, the poor could be pardoned for saying, "Damn the externalities, full speed ahead.”
Looking ahead, the Council of Economic Advisers projected a rise in real GNP (in 1969 dollars) of roughly $325 billion, or 35 percent, from 1970 to 1976. In the face of claims on these increases that are already staked out or clearly in the making—claims that leave only a small net "fiscal dividend" by 1976—it will be hard enough to finance the wars on poverty, discrimination, and pollution even with vigorous economic growth. Consider the problem in a no-growth setting: to wrench resources away from one use to transplant them in another, to wrest incomes from one group for transfer to another, to redeploy federal revenues from current to new channels (even assuming that we could pry loose a substantial part of the $70 billion devoted annually to military expenditures)—and to do all this on a sufficient scale to meet the urgent social problems that face us—might well involve us in unbearable social and political tensions. In this context, one rightly views growth as a necessary condition for social advance, for improving the quality of the total environment.
Apart from the tangible bounties that growth can bestow, we should keep in mind some of its intangible dividends. Change, innovation, and risk thrive in an atmosphere of growth. It fosters a social mobility and opens up options that no stationary state can provide. This is not to deny that a no-growth economy, with its large rations of leisure, would appeal to those in the upcoming generation who lay less store by the work ethic and material goods than their forebears. But if they associate this with tranquility—in the face of the intensified struggle for shares of a fixed income on the part of their more numerous and more competitive contemporaries—I believe they are mistaken.
Walter W. Heller, Regents' Professor of Economics at the University of Minnesota.
A version of this article appeared in print in the September 1972 issue of Resources magazine.
