Do you remember The Bottom Billion, Paul Collier’s 2007 book which became a classic? If you do, you will certainly like his latest work, The Plundered Planet. He came to launch his new book to the Bank, and I found it both fascinating and provocative. Let me give some examples of why.Professor Collier, now the Director of the Centre for the Study of African Economies at Oxford University, declares a two-front war on economists and environmentalists at the same time. He is against what he calls “utilitarian economists,” because if left on their own, they would end up plundering the planet. But Collier also takes on “romantic environmentalists,” who would be unable to eradicate hunger in case they’re given the chance to rule the world. So as you can see, the book’s premises don’t really fit into the script of the blockbuster, Oscar-winning movie Avatar.
For Collier, who also worked as the Bank’s Research Director some years ago, Nature is the lifeline for the countries of the bottom billion – and thus cannot remain untouched. With a strong faith in the power of well-informed ordinary citizens, Collier proposes a series of international standards that would help poor countries rich in natural assets better manage those resources. Technology, which enlarges the capacity of ordinary citizens, is also necessary to turn Nature into assets. But of course, in order to be effective and benefit the bottom billion instead of just the few at the top, regulation, which requires governance, is another seminal element of the equation to create prosperity. If you leave regulation out of the equation, as some Libertarians do, the result is nature plundered. But if you end up with too much regulation – curbing the use of Nature – and thus preventing technology, then the result is hunger. And I’m certainly not one of those radical, romantic environmentalists who can imagine a bottom billion who is hungry but happy.
What does Professor Collier have to say about this? Well, he presents us with a chain of decisions that need to go right in order for a low-income society to become prosperous. First, a society has to turn Nature into assets through a discovery process; then “capture” them through a taxation process; and finally invest them in a way so as to break the limits to what economists call “absorptive capacity” (what he calls “investing in investing”). Challenges come from the fact that the outcome of this complex chain of decisions is only as good as the weakest link in it.
As Professor Collier says, even if economists only measure Nature as assets, environmentalists tend to moralize Nature without analyzing it. So I totally agree with him on the fact that if we want a prosperous world without hungry people, we have to use nature productively and sustainably, and not just keep it untouched.
Originally published at Growth and Crisis Blog and reproduced here with the author’s permission.
Opinions and comments on RGE EconoMonitors do not necessarily reflect the views of Roubini Global Economics, LLC, which encourages a free-ranging debate among its own analysts and our EconoMonitor community. RGE takes no responsibility for verifying the accuracy of any