"Let them eat pollution": capitalism and the world environment

Monthly Review, Jan, 1993 by John Belamy Foster

On December 12, 1991, Lawrence Summers, chief economist of the World Bank, sent a memorandum to some of his colleagues presenting views on the environment that are doubtless widespread among orthodox economists, reflecting as they do the logic of capital accumulation, but which are seldom offered up for public scrutiny, and then almost never by an economist of Summers' rank. This memo was later leaked to the British publication, The Economist, which published part of it on February 8, 1992, under the title "Let Them Eat Pollution." The published part of the memo is quoted in full below:

Just between you and me, shouldn't the World Bank be encouraging more migration of the dirty industries to the LDCs [Less Developed Countries] ? I can think of three reasons: (1) The measurement of the costs of health-impairing pollution depends on the foregone earnings from increased morbidity and mortality. From this point of view a given amount of health-impairing pollution should be done in the country with the lowest cost, which will be the country of the lowest wages. I think the economic logic behind dumping a load of toxic waste in the lowest-wage country is impeccable and we should face up to that. The costs of pollution are likely to be non-linear as the initial increments of pollution will probably have very low cost. I've always thought that under-populated countries in Africa are vastly underpolluted; their air quality is probably vastly inefficiently low [sic] compared to Los Angeles or Mexico City. Only the lamentable facts that so much pollution is generated by non-tradeable industries (transport, electrical generation) and that the unit transport costs of solid waste are so high prevent world-welfare-enhancing trade in air pollution and waste.

(3) The demand for a clean environment for aesthetic and health reasons is likely to have very high income-elasticity. The concern over an agent that causes a one-in-a million change in the odds of prostate cancer is obviously going to be much higher in a country where people survive to get prostate cancer than in a country where under-five mortality is 200 per thousand. Also, much of the concern over industrial atmospheric discharge is about visibility-impairing particulates. These discharges may have very little direct health impact. Clearly trade in goods that embody aesthetic pollution concerns could be welfare-enhancing- While production is mobile the consumption of pretty air is a non-tradeable. The problem with the arguments against all of these proposals for more pollution in LDCs (intrinsic rights to certain goods, moral rights, social concerns, lack of adequate markets, etc.) [is that they] could be turned around and used more or less effectively against every Bank proposal for liberalization.

The World Bank later told The Economist that in writing his memo Summers had intended to "provoke debate" among his Bank colleagues, while Summers himself said that he had not meant to advocate "the dumping of untreated toxic wastes near the homes of poor people." Few acquainted with orthodox economics, however, can doubt that the central arguments utilized in the memo were serious. In the view of The Economist itself (February 15, 1992), Summers' language was objectionable but "his economics was hard to answer."

Although its general meaning could not be clearer, this entire memo deserves to be summarized and restated in away that will bring out some of the more subtle implications. First, the lives of individuals in the Third World, judged by "foregone earnings" from illness and death, are worth less-the same logic says frequently hundreds of times less--than that of individuals in the advanced capitalist countries where wages are often hundreds of times higher. The low wage periphery is therefore the proper place in which to dispose of globally produced toxic wastes if the overall economic value of human life is to be maximized worldwide. Second, Third World countries are "vastly underpolluted" in the sense that their air pollution levels are "inefficiently low" when compared with highly polluted cities like Los Angeles and Mexico City (where schoolchildren had to be kept home for an entire month in 1989 because of the abysmal air quality). Third, a clean environment can be viewed as a luxury good pursued by rich countries with high life expectancies where higher aesthetic and health standards apply; worldwide costs of production would therefore fall if polluting industries were shifted from the center to the periphery of the world system. Hence, for all of these reasons the World Bank should encourage the migration of polluting industries and toxic wastes to the Third World. Social and humanitarian arguments against such world trade in waste, Summers concludes, can be disregarded since they are the same arguments that are used against all proposals for capitalist development.

It is important to understand that this policy perspective, with the utter contempt that it displays both for the world's poor and the world environment, is by no means an intellectual aberration. As the World Bank's chief economist Summers' role is to help create conditions conducive to world capital accumulation, particularly where the core of the capitalist world system is concerned. Neither the welfare of the majority of the population of the globe nor the ecological fate of the earth--nor even the fate of individual capitalists themselves-can be allowed to stand in the way of this singleminded goal.