January 31, 2011 4:39 am

Consumptionomics

 

Consumptionomics: Asia’s Role in Reshaping Capitalism and Saving the Planet, by Chandran Nair, Infinite Ideas, RRP£19.99, 256 pages

Sales of Rolls-Royce cars rose 171 per cent last year, helped by heavy demand in China, India and other Asian countries, according to BMW, owner of the ultimate luxury car brand. The increase was attributed partly to the attraction to Asia’s rising rich of the new “entry-level” baby Rolls – priced at a mere $300,000. Chandran Nair, author of Consumptionomics, must have his head in his hands when he hears such news.

An environmental consultant and founder of the Global Institute for Tomorrow think-tank, Nair is adamant that nothing good will come to any of us if success in the new economies of the east is defined by flashy, western-style consumption. His book is a call for Asia’s developing nations to eschew consumerism and adopt a more ascetic economic model that will deliver sustainable development and save the planet from environmental disaster.

Life might not be as much fun in his world as it is for the lucky ones who become wealthy under liberal capitalism. “Golf and car racing might be out but badminton and social dancing are more popular,” he suggests in his vision of leisure time in a Nairian society. But the benefits of development would be spread more widely, damage to the earth’s resources would be controlled and people would probably spend less time working.

Nair’s starting point is that the world simply cannot survive the consequences of the growth of highly populous Asian economies to levels of development reached by industrialised countries if that is to be achieved on the same resource-guzzling terms as western development.

His palpable sense of frustration at the direction the world is taking is sharpened by the current conventional wisdom that global economic recovery largely depends on Chinese consumers buying more, to fuel demand and balance the mammoth deficits run up in boom times by western economies.

Throughout the book, Nair evinces an angry disdain for western-style capitalism, which he regards as setting the world on a path to destruction by its devotion to the ideology of markets and its voracious appetite for finite resources. He’s none too complimentary either about its media cheerleaders, including this newspaper.

“The biggest lie of all is that consumption-driven capitalism can deliver wealth to all,” he writes. “In Asia it can only deliver short-term wealth to a minority; in the long term, it can only deliver misery to all. This is the intellectual dishonesty at the heart of the model the west has peddled to Asia.”

Nair points to the familiar issue of energy use, saying that if Asia’s population was to use as much energy per person as Europeans do today (relatively modest compared to Americans), then it would use eight to nine times as much energy as the US currently consumes. Perhaps more startling is an estimate he uses for poultry consumption. Americans will eat 9bn birds this year, apparently. If by 2050 Asians ate the same amount per person, they would swallow more than 120bn. That’s a lot of battery chickens.

Nor is Nair impressed by arguments that technology will ultimately solve issues such as energy shortages and climate change, allowing economic growth and consumption to go on expanding. He dismisses the notion that Asia should concentrate on growth and then, when it is rich, clean up afterwards. What he demands is a radical change in the prevailing global economic model and its governance.

Nair insists he is no tree-hugger or communist. He made his living for a long time as a senior executive at ERM, an environmental consultancy working with companies and governments at the heart of the very consumerist economy that he decries. He says what he wants is a reshaping of capitalism, not its replacement.

He is ambivalent when it comes to what form of governance will be required to deliver a society where constraints are needed to control markets, resources and behaviours. He backs democracy only insofar as it can help deliver his vision of sustainable development. He clearly feels that Singapore-style “guided democracy” or even a more authoritarian approach is preferable if it achieves his ends.

But the shape of a Nairian Asia does emerge. It would be made up of strong nation-state governments willing to take unilateral action on issues such as controlling natural resource exploitation and domestic agriculture and industry. Governments would get bigger and spend more with an emphasis on sustainable infrastructure such as public transport. Carbon, natural resources and financial transactions would be taxed – possibly allowing for a reduction or elimination of payroll taxes. Agriculture would be deindustrialised, with a drive to return to labour-intensive farming to ensure sufficient output and stop mass migration to cities.

What would life be like for the individual? They would be expected to forgo owning a car, would pay high prices for meat and restaurant portions would be restricted. But income differentials would be minimised and access to the benefits of technology widely shared.

He doesn’t say it but Nair is describing a kind of Asian Norway, with the benefits of natural resources controlled and socialised to a high degree, rural communities subsidised to keep people on the land, fisheries protected, a high commitment to energy efficiency and high taxation to support high levels of social welfare.

Prosperous but modest Norway might be a good example – but it is tiny compared with the huge growth economies of China, India, Indonesia and the rest. With sales of Rolls-Royce cars booming and wider appetites for consumer goods rising rapidly in China and elsewhere, egged on by eager western producers, Nair’s vision for Asia may seem like whistling in the wind.

Hugh Carnegy is the FT’s executive editor

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