Jerry Taylor is Director of Natural Resource Studies
at the Cato Institute and Senior Editor of Regulation Magazine.
The mantra of "sustainable development" is constantly on the lips of international agencies and non-governmental organizations engaged in assistance to lesser-developed countries. The concept seems innocuous enough; after all, who would favor "unsustainable development?" But the fundamental premise of the idea-that economic growth, if left unconstrained and unmanaged by the state, threatens unnecessary harm to the environment and may prove economically ephemeral-is dubious. Indeed, the policy prescriptions that are generally endorsed by those concerned about sustainable development are inimical to China's best environmental and economic interests.
This is so for three reasons:
- If economic growth were to be slowed or stopped-and sustainable development is essentially concerned with putting boundaries around economic growth-it would be impossible to improve the environmental conditions of China;
- The bias for central planning on the part of those endorsing the concept of sustainable development will only serve to make environmental protection more expensive, and hence, China will would be able to "purchase" less of it; and
- Strict pursuit of sustainable development, as many environmentalists mean it, would only do violence to the welfare of future generations.
The concept of sustainable development is an important milestone in environmental theory because it posits how society itself should be organized, not simply why environmental protections should be adopted or how best they can be implemented. James Sheehan of the Competitive Enterprise Institute sees it as "an overarching political philosophy merging the twin goals of conservation and controlled economic development" meant by many to be "the central organizing principle for a world of economically and ecologically interdependent nations" (Sheehan 1996: 1). Indeed, many advocates of sustainable development are quite open about the radical implications of the sustainable development. Says Monsanto's CEO Robert Shapiro, a strong proponent of the idea:
Our nation's economic system evolved in an era of cheap energy and careless waste disposal, when limits seemed irrelevant. None of us today, whether we're managing a house or running a business, is living in a sustainable way. It's not a question of good guys and bad guys. There is no point in saying 'If only those bad guys would go out of business, then the whole world would be fine.' The whole system has to change. There is a huge opportunity for reinvention [quoted in Magretta 1997: 80-1].
Of course, just how much social and economic change is necessary to achieve sustainability depends upon how "unsustainable" one believes the present to be. Many clearly believe the present to be quite unsustainable and thus are prepared for radical change. Even a relative environmental moderate such as William Ruckelshaus, a Republican and two-time director of the U.S. Environmental Policy Agency, says approvingly:
Can we move nations and people in the direction of sustainability? Such a move would be a modification of society comparable in scale to only two other changes: the agricultural revolution of the late Neolithic and the Industrial Revolution of the past two centuries. Those revolutions were gradual, spontaneous, and largely unconscious. This one will have to be a fully conscious operation, guided by the best foresight that science can provide-foresight pushed to its limit. If we actually do it, the undertaking will be absolutely unique in humanity's stay on the earth [Ruckelshaus 1994: 348].
Others are less alarmed and thus believe sustainability could be purchased at a somewhat less wrenching social and economic price. But one thing most sustainable development advocates agree upon is the tremendous threat that Chinese economic growth poses to global sustainability. Says Shapiro, "If emerging economies have to relive the entire industrial revolution with all its waste, its energy use, and its pollution, I think it's all over" (quoted in Magretta 1997: 87). Douglas Murray, former president of the China Institute and executive secretary of the Committee on International Relations with the People's Republic of China, considers China's environment an international, not a domestic, issue.
For the health of the planet, and of the United States, China must be judged a vital American interest. The reasons are many and obvious, but still not widely appreciated. Though lacking an immediate, galvanizing crisis-Amazon fires, African famine, Chernobyl-China presents ecological problems so severe that they constitute a collective crisis with global consequences and powerful implications for America [Murray 1993: 1].
Megan Ryan and Christopher Flavin of the Worldwatch Institute agree: "The prospect of one-fifth of humanity suddenly entering the consumer age will force industrial countries. . .to face up to the unsustainability of their current practices. The world cannot afford to have another billion people driving around in big cars or eating fast food hamburgers" (Ryan and Flavin 1995: 129). The Chinese, it is widely agreed, cannot be allowed the luxuries of today's Western consumers.
Fortunately, those alarmists are wrong. It is the current Western system of (more-or-less) free markets that is the best hope for environmentally sustainable development. The agenda forwarded by the sustainable development lobby would ironically usher in the very environmental destruction that they hope to avoid by central planning.
What Is Sustainable Development?
Despite its institutionalization, sustainable development is rather difficult to define coherently. The United Nations Commission on Economic Development (UNCED), in its landmark 1987 report titled Our Common Future, defines sustainable development as that which "meets the needs of the present without compromising the ability of future generations to meet their own needs" (United Nations 1987: 8). But that definition is hopelessly problematic. How can we be reasonably expected to know, for instance, what the needs of people in 2100 might be? Moreover, one could point out that one way people typically "meet their own needs" is by spending money on food, shelter, education, and whatever else they deem necessary or important. Is the imperative for sustainable development, then, simply a euphemism for the imperative to create wealth (which, after all, is handed down to our children for their subsequent use)? True, there are human needs-such as the desire for peace, freedom, and individual contentment-that cannot be met simply by material means, but sustainable development advocates seldom dwell on the importance of those nonmaterial, non resource-based" psychological needs when discussing the concept of sustainable development.1
Thus, sophisticated proponents of an environmentally sustainable development path are forced to discard as functionally meaningless the UNCED definition. Otherwise, the UNCED definition can be read as a call for society to maximize human welfare over time. An entire profession has grown up around that proposition. They are known as "economists," and maximizing human welfare is known to them not as "sustainable development" but as "optimality." Few sustainable development advocates would be comfortable with the idea that Adam Smith's The Wealth of Nations was the world's first call for sustainable development.
Economists David Pearce and Jeremy Warford, two of the world's more serious thinkers about sustainable development, thus disclose that many advocates mean sustainable development to describe "a process in which the natural resource base is not allowed to deteriorate" (Pearce and Warford 1993: 8). This is generally known as the "strong" definition of sustainability. The "weak" definition allows the natural resource base to deteriorate as long as critical biological resources are maintained at a minimum critical level and the wealth generated by the exploitation of natural resources is preserved for future generations, who are otherwise "robbed" of their rightful inheritance. Natural resources are considered just another form of capital. Weak sustainability, then, can be thought of as the amount of consumption that can be sustained indefinitely without degrading capital stocks.
Given varying assessments about how unsustainable the present is, how rigorously various resources ought to be sustained, and what sustainable development should actually entail, it is not surprising that a multitude of policy agendas have been advanced to promote this governing concept. Unfortunately, both "strong" and "weak" definitions of sustainable development pose problems. As Robert Hahn (1993: 1750) points out, the narrower the definition of sustainable development, the easier it is to determine, but the less satisfactory the concept.
The Chimera of Resource Scarcity
A constant refrain from the sustainable development lobby is the importance of not "drawing-down" the natural resource base. Underlying much of the concern about the importance of sustainable development is the belief that, if the world's economy continues to grow unchecked, economic growth will, in the not-too-distant future, consume natural resources beyond a critic minimum threshold and lead to a major collapse of the world's economy with dire consequences to human and ecological health.2 While there is much about this theory to criticize, the most important criticism relates to a fundamental misunderstanding of the nature of natural resources.
Resources are simply those assets that can be used profitably for human benefit. "Natural" resources, then, are a subset of the organic and inorganic material we think of as constituting the biological "environment," since not all of that material can be used profitably for human benefit. But what can be used productively changes with time, technology, and material demand. Waves, for example, are not harnessed for human benefit today and thus cannot really be thought of as a "natural resource." But the technology to harness the movement of waves as a means to generate energy certainly exists, and the day when the cost of doing so is lower than the cost of alternative energy sources is the day when waves become a natural resource. Uranium, to cite another example, would not have been considered a resource a century ago but is most certainly thought of as such today. Petroleum was not an important resource 100 years ago but today is thought of as perhaps the most important resource to modern society. And if cold fusion technology had panned out, coal would be another example of yesterday's resource but tomorrow's relatively useless rock.
Thus, the "natural resource base" is itself a relative thing and its components vary greatly with time due to technology and material demand. The composition of the natural resource base of a century ago is substantially different than the natural resource base of today. Conserving today's natural resource base does not ensure that tomorrow's natural resource base is secure, and drawing down today's natural resource base does not necessarily mean that tomorrow's natural resource base is in jeopardy. More importantly, the relative abundance of a society's natural resource base can change dramatically with technological advance. This, of course, is counterintuitive for many, who continue to think of resources as fixed and finite. Monsanto's Shapiro, for example, speaks for many when he posits that:
We are encountering physical limits. You can see it coming arithmetically. Sustainability involves the laws of nature- physics, chemistry, and biology-and the recognition that the world is a closed system. What we thought was boundless has limits, and we're beginning to hit them. That's going to change a lot of today's fundamental economics, it's going to change prices, and it's going to change what's socially acceptable [quoted in Magretta 1997: 82].
This sentiment is reflected in discussion about China's long-term economic potential. As Ryan and Flavin (1995: 113) assert, "China's dilemma is that it has a huge population but a far smaller slice of the world's resources.. . .With 22 percent of the world's population, China has only 7 percent of the [planet's] fresh water and cropland, 3 percent of its forests, and 2 percent of its oil." While other nations have overcome their relative lack of natural resources by importing them from abroad, Ryan and Flavin, like much of the sustainable development community, believe that "China's size precludes this option. Recent projections cast doubt on the ability of the rest of the world to supply all the oil or food that this country may require in the decades ahead" (p. 113). If China's per capita oil consumption were that of Japan, for example, Ryan and Flavin note that China "would need 61 million barrels daily-nearly equal to the current world production" (p. 124). Moreover, "even with yield increases (in cropland, through the year 2030), production is likely to fall by at least one fifth, due to loss of cropland, leaving a deficit to be made up by imports of nearly 400 million tons. It is not at all clear who would supply this. Since 1980, annual world grain exports have averaged just 200 million tons" (p. 120).
The problem with the finite-resource theory is nicely illustrated by recent trends in oil production. There are 6,784 trillion fewer barrels of oil in the ground today than there were in 1981, the year in which relative oil scarcity was greatest.3 At first glance, then, one might think that the natural resource base has deteriorated. Yet oil is relatively more abundant today than it was 17 years ago. After adjusting for inflation, the price of a barrel of Saudi crude has declined by 62 percent and U.S. crude by 64 percent since 1980. The reasons for this increased oil abundance are several-fold. First, new technologies have emerged that have made oil discovery and production far more efficient and thus less costly. Second, greater efficiency of resource use (a reaction to previous run-ups in petroleum prices as well as ongoing technological advances) has contributed to reducing the amount of oil necessary to produce a unit of goods or services and, hence, the relative abundance of the energy resource base. Indeed, the amount of petroleum and natural gas necessary to produce a dollar's worth of gross domestic product has declined by 29 percent since 1980. The story is not unique to petroleum; all resources have become far more abundant-not more scarce-throughout the 20th century (and indeed, throughout recorded history).4
If sustainable development, then, is understood as an admonition that the aggregate size of the natural resource base (absent any consideration of demand) should "not be allowed to deteriorate," then sustainable development is not particularly helpful as a policy device. First, it posits wrongly that absolute (as opposed to relative) scarcity is the primary threat to the economy and human society at large. Second, the theory is oblivious to the ongoing process of resource creation. As Harold Barnett and Chandler Morse (1963) explained in their classic work Scarcity and Growth, as resources become more scarce, people will anticipate future scarcities, prices will be bid up, incentives will be created for developing new technologies and substitutes, and the resource base will be renewed. Indeed, Barnett and Morse's ideas are now widely excepted in the world of resource economics and are not even particularly controversial among those who specialize in that field within academia.5
Is Barnett and Morse's optimism regarding "just in time" delivery of new technologies and resource subsidies justified? Well, historical experience-as noted earlier-would certainly seem to justify their optimism. Those who find Barnett and Morse's theory counterintuitive betray a fundamental misunderstanding of the genesis of resources. Natural resources do not exist independent of man and are not materials we simply find and then exploit like buried treasure. Natural resources, on the contrary, are created by mankind. As resource economist Thomas De Gregori (1987: 1243,1247) points out, "Humans are the active agent, having ideas that they use to transform the environment for human purposes. Resources are not fixed and finite because they are not natural. They are a product of human ingenuity resulting from the creation of technology and science." Political scientist David Osterfeld (1992: 99) thus concludes, "Since resources are a function of human knowledge and our stock of knowledge has increased over time, it should come as no surprise that the stock of physical resources has also been expanding." Obsessing nearly exclusively on conserving present natural resources is akin to a farmer who obsesses over conserving eggs rather than the chickens that lay them.
Even so, natural resource scarcity is simply not a binding constraint on economic growth in lesser-developed countries. In a classic study, Joseph Stiglitz (1974) found that exogenous technological advances lead to long-run gains in per capita consumption in lesser-developed countries under conditions of exponential population growth and limited, exhaustible stocks of natural resources. Edward Barbier (1996) found that even in an endogenous growth economy, technological change is resource augmenting. As Barbier and Thomas Homer-Dixon (1996: 3) put it, "Sufficient allocation of human capital to innovation will ensure that resource exhaustion can be postponed indefinitely, and the possibility exists of a long-run endogenous steady-state growth rate that allows per capita consumption to be sustained, and perhaps even increased, indefinitely."
Unfortunately, the entire question of whether resource availability will or will not constrain Third World development is muddied by a fundamental misunderstanding of Western economic history. Ye Ruqiu, an advisor to the Chinese government regarding sustainable development, asserts that "the high economic growth and wealth of Western nations were built upon their low-price use of natural resources, tremendous pollution emissions, and excessive consumption, which was in reality an unsustainable production and consumption pattern" (Ye n.d.). China, he says, must not-indeed, cannot- follow the West's lead. Yet growth in the advanced industrialized world was built not by low-cost exploitation of natural resources but by economic liberty and the rule of law.6
What does all this mean for China? Well, it means that as long as economic liberalization continues, China will begin to create more natural resources than it consumes, just as is done by more economically advanced Western economies. Indeed, even the World Resources Institute (WRI)-a prominent alarmist about sustainability trends-acknowledges that "the trend is toward increased sustainability" in China (Hammond et al. 1995: 25).
Other Theoretical Problems of Sustainable Development
Other important problems cripple the utility of sustainable development theory, at least in its "strong" variant. Among them is an unwarranted bias for "natural" as opposed to "man-made" capital, the presumption that the ecology is well-served by "sustaining" resources in the first place, the idea that sustainability ought to be a driving concern for commercial or industrial undertakings, and the belief that intergenerational equity is a useful idea for public policy.
Natural versus Man-Made Capital
While advocates of sustainable development argue that natural capital is in most cases more desirable than the "man-made" capital created from its exploitation, the wealth created by exploiting resources is often more beneficial than the wealth preserved by "banking" those resources for future use. Otherwise, there would be little point in exploiting resources for commercial use in the first place.
The Unnaturalness of Resource Equilibrium
There is growing doubt within the ecological community about whether stocks of natural capital are naturally constant at all. "Strong" sustainability assumes that ecosystems naturally evolve toward some equilibrium and eventually stabilize. But within the academic community, lack of empirical evidence supporting the theory has led to a wholesale questioning of the equilibrium paradigm.7
- If ecosystems do not tend toward stabilization, then policies that are intended to promote "sustainable" capital are unnatural and without ecological merit;
- If resource stocks are not functionally and structurally complete, then "sustainable management" of those stocks will prove sub-optimal; and
- If ecosystems do not tend toward stability, then calculations about the economic or ecological value of natural capital are impossible on a macro level.
Uncertainties surrounding the nature of ecosystem evolution and the means by which resource stocks can best be maintained have two main implications for policy analysts. First, conclusions about whether or not certain economic activities are "sustainable" are more problematic than some would like to think. Second, preserving indefinitely certain ecological states is less a matter of ecological necessity than social preference.
The environmental benefits of sustainable resource use are often oversold while the environmental costs of unsustainable use are frequently overblown. "Sustainable development" is a concept that looks good on paper but is built upon a shaky ecological foundation indeed.
Sustainability über Alles?
While it is certainly true that sustainability can be an important consideration for certain economic or social arrangements, it does not necessarily follow that sustainability should be elevated to the status of some overriding criterion for public policy. After all, there are innumerable human activities and undertakings that are highly desirable-even necessary-but, unfortunately, not indefinitely sustainable. We must make a distinction between sustainability as a purely technical concept and optimality, which is a normative concept. Many economic activities that are unsustainable may be perfectly optimal and many that are sustainable may not be desirable, let alone optimal (Beckerman 1996: 145).
The Incoherence of Intergenerational Equity
It is fashionable in certain intellectual circles to go even further and argue, as does Georgetown Professor of International Law, Edith Weiss (1989), that future generations have as much right to today's environmental resources as we do, and that we have no right to decide whether or not they should inherit their share of those rights.8 Indeed, this concept of "intergenerational equity" is rife throughout environmental literature.
Yet the concept of tangible rights to resources for those not yet even conceived is dubious, to say the least.9 First, it is philosophically inconsistent. Those disincorporated beings not yet even a glimmer insomeone's eye are said to have "rights," yet the moment they are conceived, they are legally held to have no rights whatsoever. Leaving aside the ethics of abortion, in order to be consistent, those who defend the rights of future generations must by the same logic oppose abortion (a position few environmentalist activists hold, given their allegiance to population control). And once individuals are conceived, we do not maintain that they have a "right" to all the resources of the parent.
The concept of intergenerational equity is hopelessly incoherent. If the choice to "draw down" resources is held exclusively by future generations, then are we not some previous generation's "future" generation? Why is the present generation bereft of that right? If the answer is that no generation has the right to deplete resources as long as another generation is on the horizon, then the logical implication of the argument is that no generation (save for the very last generation before the extinction of the species) will ever have a right to deplete any resource, no matter how urgent the needs of the present may be. If only one generation (out of hundreds or even thousands) has the right to deplete resources, how is that "intergenerational equity?"
Compounding that problem is the fact that the entire discussion of intergenerational equity is bereft of any acknowledgement that future generations will almost certainly be far, far better off economically than present generations. If one were serious about equality between generations, then, we might take economist Steven Landsburg's advice and "allow the unemployed lumberjacks of Oregon to confiscate your rich grandchildren's view of the giant redwoods." The math is actually quite simple. If U.S. per capita income manages to grow in real terms by 2 percent a year (a conservative assumption), then in 400 years, the average American family of four will enjoy an income of $2 million a day in 1997 dollars (roughly Microsoft's CEO Bill Gates' current income). If per capita income grew a bit faster-say, at the rate reported by South Korea over the past couple of decades-it would take only 100 years for an average family of four to earn $2 million daily. "So each time the Sierra Club impedes economic development to preserve some specimen of natural beauty," writes Landsburg, "it is asking people who live like you and me (the relatively poor) to sacrifice for the enjoyment of future generations that will live like Bill Gates" (Landsburg 1997).
Furthermore, the notion of resource rights for future generations is premised on the argument that one has a "right" to forcibly take property from someone else in order to satisfy a personal need. Although that is an argument best left unexplored here, suffice it to say that such a claim is so expansive and fraught with peril that few philosophers have taken it seriously (see, for example, MacCallum 1967 and Pilon 1979).
Finally, the belief that future generations are more likely to be protected by political rather than market agents strikes one as incredibly naïve. The failure of central planning around the world points to the absurdity of placing the future in the hands of government rather than in the hands of profit-seeking entrepreneurs who stand to gain by increasing the future value of resources to consumers and who will lose their wealth if they fail. Indeed, any clear-eyed survey of government versus market decisionmaking finds that market agents are far more likely to invest for the future than governmental agents (see Stroup 1991 and Smith 1993).
Since advocates of sustainable development rely upon governmental action to ensure the success of their agenda, it is unlikely-no matter how well intentioned their efforts or successful their political campaign-that their goals will be realized via state intervention in the economy.
In sum, it is hard to overemphasize the wrongheadedness of sustainable development as a useful policy construct. Society has managed to "sustain" development for approximately 3,000 years without the guidance of green state planners. The result is not only a society that is both healthier and wealthier than any other in history, but a society with more natural resources at its disposal than ever before. Experience has taught that the best way to sustain development-or to maximize human welfare-is to protect economic liberty and proscribe the boundaries of state authority to protecting life, liberty, and property (Gwartney and Lawson 1997).
As an all-encompassing governing philosophy, sustainable development is a dubious pipe dream. Even promoters of the concept are increasingly in agreement that sustainable development must ensure that economic and social considerations are balanced with environmental concerns and are not trumped by them (Munasinghe and Cruz 1995: 7). As a policy admonition, it might well have its uses, but sustainable development (intelligently considered) is but one consideration in the quest to maximize public welfare.
Wealth = (Human + Environmental) Health
China's present environmental problems are those typically encountered by nations transitioning from early-industrial to late-industrial stages of development. First, as a lesser-developed nation, China's obsolescent machinery, dated production techniques, and top-heavy, centralized industrial structures are highly pollution-intensive. Meanwhile, China's fantastic economic growth has been accompanied by newer forms of pollution, particularly those associated with the automobile, urban congestion, waste disposal, and sanitation. In essence, China is today experiencing the worst of both the developed and underdeveloped worlds (Beckerman 1996: 31).
Is this state of affairs environmentally "sustainable"? If Chinese statistics can be believed, the answer is "yes." An official 1994 report on the state of the environment in China notes that, just as in the West, air quality is not worsening despite continuing urbanization, water quality is slowly improving, and discharges of industrial and toxic wastes are slowing (Ye n.d.). Rural Chinese, for example, have seen access to "improved water supplies" increase from 50 percent in 1985 to 75 percent by 1990 (Riskin 1996: 364).
What China is experiencing is nothing short of what the West experienced a century ago. As the WRI (1998: 8) observes:
Just a century ago, health conditions in Europe, North America, and Japan were similar to those of the least developed countries today, as was environmental quality. Conditions in London and other major centers were squalid; sewage-filled rivers, garbage-strewn streets, and overcrowded and dank housing were the norm. Much of the population lacked access to fresh water or adequate sanitation. Epidemics of typhus, cholera, tuberculosis, and measles swept these cities. Indeed, in the world's most prosperous cities at the time, the infant mortality rate-the number of children who die before their first birthday-was more than 100 per 1,000 live births, and in some places it exceeded 200. Diarrheal and respiratory diseases and other infections were the main cause of death.
The environmental plight of cities such as London might not have been indefinitely "sustainable," but industrialization-even when accompanied by heavy pollution-contributed to improvements in human welfare. Industrialization was accompanied by an increase in life expectancy and an improved standard of living. Incomes rose so that people were able to afford more environmental amenities, better health care, modern sanitary investments, and an improved diet. Economic growth spawned new manufacturing technologies that were more efficient, less resource intensive, and, hence, less polluting. Moreover, these gains in human welfare accelerated over time.
Indeed, it is the lack of economic growth-not the pollution spawned by growth-that is the root cause of most health-related problems in the lesser-developed world today (Pritchett and Summers 1993). As the WRI (1998: 14) notes:
Of all the factors that combine to degrade health, poverty stands out for its overwhelming role. Indeed, WHO [the World Health Organization] has called poverty the world's biggest killer. Statistically, poverty affects health in its own right: just being poor increases one's risk of ill health. Poverty also contributes to disease and death through its second-order effects; poor people, for instance, are more likely to live in an unhealthy environment.
While this argument is generally accepted throughout academia, sustainable development advocates counter that industrialization in the developing world today is proceeding in a far more compressed time frame than it did centuries ago (Krustifm 1997: A14). Moreover, it is thought, rapid population growth compounds the pollution problem so dramatically that the various pollution sinks of the Third World are being exceeded far more rapidly than they ever were in the industrialized West while also exposing more people to those harms (WRI 1998: 51). Others doubt whether the development experience of the West can translate into the Third World because, as Pearce and Warford (1993: 263) argue, "A great many environments in the developing world are ecologically fragile. They are capable of sustaining certain levels of activity and certain levels of population, but exceeding that carrying capacity may well lead to growing poverty." The data suggest that the skeptics are wrong. Observes the WRI (1998: 14), "As the disproportionate burden of ill health in the poorest countries shows, a clear correlation exists between health and wealth. By and large, the wealthier a country becomes, or the higher its average per capita income, the healthier its population becomes."
In the case of China, after two decades of robust economic growth:
- The occurrence of infectious disease is only slightly higher in China than in the advanced industrialized West (WRI 1998: 10, 261);
- Life expectancy in China now stands at 69 years, far higher than other economies of similar size or wealth (p. 247);
- The infant mortality rate has declined from 52 per 1,000 births in the period 1975-80 to 38 per 1,000 births today (p. 259);
- Although China has added 200 million people since 1980, less land is required to feed China's population today than was required 18 years ago (p. 299). Cereal yields alone have increased 17 percent per hectare over the past 10 years (p. 289);
- Average daily per capita calorie and protein consumption increased 13 percent between the periods 1982-84 and 1992-94 (p. 289); and
- Only 17 percent of those under five years of age experience malnutrition, a far better situation than in most other countries of comparable wealth (World Bank 1996: 198).
The Environmental Kuznets Curves: Empirical Support for Growth
Empirical data support the argument that economic growth initially worsens environmental quality in underdeveloped nations but eventually contributes to environmental improvements. Numerous economists have studied the relationship today between economic growth, population, and industrialization and environmental quality (known in the economics community as "environmental Kuznets curves," or EKCs, because the inverted U-shaped relationships discovered when per capita income and environmental indicators are put in graph-form bear a striking resemblance to the relationship between income inequality and economic development discovered by economist Simon Kuznets in 1955 and found that, beyond a certain point, economic development does indeed reduce the burden of pollution. Data compiled by the World Bank for example demonstrates an unmistakable correlation between per capita income and access to safe drinking water, sanitation, and declining urban concentrations of particulate matter and sulfur dioxide (El-Ashry 1993:18).
Will China, however, prove an exception to the rule? Almost certainly not. Not only are major indicators of human health trending in a positive direction, but experts from the Harvard School of Public Health and the World Health Organization predict continuing improvements in life expectancy in China over the next several decades (Murray and Lopez 1997:1499). The most harmful pollutants in China are by-products of poverty, and as that problem is alleviated so too will the problem of Chinese pollution. Moreover, the lack of even the most rudimentary pollution control devices is due not to a lack of desire for those devices, but to an inability to pay for them. Since China's per capita income in 1991, adjusted for domestic purchasing power, stood at about $3,000, the country is on the positive side of virtually all the environmental Kuznets curves and continuing improvement of environmental quality is almost inevitable.
Economic growth will also help alleviate the pressures on China's natural resource base. For instance, a large percentage of the energy used in rural households comes from traditional biomass sources such as straw or firewood. A modern energy infrastructure-a natural byproduct of economic growth-would not only alleviate a major source of indoor air pollution but would also replace rural reliance upon the land for energy. That is but one example of the larger point that must be made about economic growth and resource conservation. Lesser-developed economies, lacking the most modern technologies and production practices, are relatively inefficient and consume more natural resources per dollar of economic output than Western economies. According to one estimate, China's major industries consume 30 to 90 percent more energy than similar industries in developed countries (Huang 1992: 3). Economic growth leads to industrial modernization, which leads to resource efficiency, which, in turn, results in a reduced burden on natural resources. The increasing efficiency of Chinese energy use shows that this phenomenon is already occurring.10
Leapfrogging the Industrial Revolution?
A standard prescription for sustainable development in the developing world is for preindustrial economies to "leapfrog" the industrial revolution altogether. Since businesses now have access to advanced pollution control technologies and new "green" technologies to minimize emissions at their source-technologies not available to the West when it industrialized more than a century ago-why shouldn't lesser-developed economies skip the old industrial stage of development altogether and move directly into a 21st century economy?
To some extent, of course, "leapfrogging" is exactly what is happening in various industrial sectors today. China's rapid adoption of cellular phones in lieu of common wire-based telephone system is but one example of this phenomenon. India's rapid advance in computer software programming is another. Still, China's living standard is so low compared to the West that some industrial development is vitally necessary for simple human comfort. For example, the typical Chinese household uses only 0.03 percent of the energy consumed by the typical American household, a shortfall largely due to a lack of even the most basic modern household appliances (Chandler, Makarov, and Zhou 1990: 121).
No matter how energy efficient new appliances might prove, per capita energy consumption is bound to rise dramatically along with demand for electricity. An industrial "energy revolution" will be required irrespective of advanced technology. Even if the world market share of nonfossil fuels doubled by 2020 (about all that is technically feasible even if economic considerations were discarded), coal and oil were the fossil fuels that were the primary market "losers," and energy efficiency investments were maximized, fossil fuel consumption in China would still increase substantially, as would world carbon dioxide emissions (Leffler and Karlin 1993: 11-12).
Given the necessity of industrialization in the developing world, the decision whether to embrace advanced technological practices or industries must be made by market agents, not by government planners. When it makes economic sense to do so, the private sector will adopt "leapfrog" technologies without the need of government encouragement. It is important to remember that prices are for-a-large-part reflections of relative scarcity, and if the price of solar-fired electricity, for example, is greater than the price of coal-fired electricity, it means that greater resources are necessary to deliver solar power than coal power. Unfortunately, many of the enthusiasms of the environmental community-such as renewable energy-are far more expensive than conventional alternatives, which is the main reason why the West has yet to widely adopt them. Not only could China scarcely afford to embrace what Western economies find prohibitively expensive (for the time being, anyway), but to do so would deplete the very resource base sustainable development is supposed to protect.
A few opportunities to leapfrog old technologies indeed exist. Most cars sold in China, for instance, lack even the most basic emission controls and continue to rely on leaded fuel. While Beijing has only one-eighth the number of cars on the street as does Tokyo, the two auto fleets emit the same the amount of carbon monoxide (Johnson 1997: 2A). The undoubted increase in auto prices that would result from banning leaded gasoline and requiring basic tailpipe pollution controls would help to achieve an internalization of the costs of auto emission (the legitimate goal of making polluters pay for pollution) while achieving a relatively large amount of pollution reduction for a minimum public cost.
Still, the amount of regulatory "low-hanging fruit" in the environmental arena is less than meets the eye. China must be careful to minimize state regulatory action so that the engine of economic growth is not too greatly damaged, for it is economic growth that must ultimately occur for China's environment and human health situation to improve.11
Population Growth and Urbanization
Much has been made by the sustainable development crowd about the declining amount of land devoted to agriculture in China. From 1961 through 1990, the amount of land devoted to crops fell from 105.2 million hectares to 96.6 million, and some think those figures underestimate actual cropland losses by 20-30 percent. That 30-year decline has meant cropland dropped almost 50 percent on a per capita basis (WRI 1994: 70-71). The Chinese Academy of Sciences estimates that net cropland area is shrinking by 333,000 hectares per year (Chada 1992: 32). For Ryan and Flavin (1995: 120-21), this is largely a sign of environmental degradation (but also, it is conceded, a fact due to changing land use patterns driven by economics rather than environmental degradation), primarily from soil erosion, which harbors ill for China's ability to feed itself. Accordingly, they propose rigorous centralized land planning and national zoning controls to protect valuable farmland from other sorts of use.
Yet Chinese agricultural productivity gains have more than offset cropland retirement (WRI 1994: 71). While soil erosion is a natural product of low-intensity, subsistence agriculture on marginal lands, advanced high-intensity agriculture substantially reduces soil erosion and more than offsets the loss of soil with spectacular increases in yields (Avery 1995: 367-93; Gardner and Schultz 1995: 416-24). Thus, there is no reason to believe that the maintenance of the natural resource base is the key to agricultural sustainability in China (Crosson 1994: 45). Furthermore, the "right" mix of cropland versus industrial land is more a matter of comparative international advantage than it is a domestic engineering or scientific consideration. How much food China should produce domestically can only be answered by consideration of international grain and foodstuff prices.
Yet, as noted earlier, some scholars believe that the world would be hard stretched to provide the grain necessary to feed the Chinese people in the 21st century. Such concerns, however, are unwarranted; the planet's agricultural capacity is far greater than most non-specialists realize and is not even close to peek capacity.
Roger Revelle of Harvard-a scholar often cited glowingly by Vice President Al Gore as one of the scientific giants of this century-demonstrated convincingly that simply increasing the efficiency of water use outside the humid tropics in Africa, Asia, and Latin America would produce yields capable of feeding 18 billion people (Revelle 1984: 185-86). Extending those calculations to the arable parts of the tropics results in yields capable of feeding 35-40 billion people (Osterfeld 1992: 83). Moreover, there are promising strategies beyond increased water efficiency-such as crop hybridization, advances in cloning and bioengineering, advances in transportation of foodstuffs and storage efficiency, and simple use of productive cropland that has been allowed to go fallow due to recent declines in food demand-that can radically improve global yields (Avery 1995). And that doesn't even begin to address the increasing ease by which agricultural science can turn nonarable to arable land if the demand is sufficient to justify the investment.12 Only about 1 to 3 percent of the ice-free earth is occupied by humans, and less than one-ninth is used for agriculture. Concerns that increasing yields will cause more human health problems (from chemical contamination of the environment) than it solves are unpersuasive.13
Another common concern is that population growth will inevitably lead to an accelerated depletion of natural resources, such as timber. But a study of 64 lesser-developed countries in Africa, Asia, and Latin America found that deforestation had little to do with population growth but had much to do with lack of private property rights over forestland. Moreover, once per capita incomes exceeded $4,760 in Africa and $5,420 in Latin America, deforestation rates actually moderated slightly (Cropper and Griffith 1994: 250-54). Nor is the "footprint" of a burgeoning population as great as one might think. "The proportion of the world's land surface used for farms and pastures has remained constant at about 35 percent since mid-century. Though much of the land surface has been altered by human action, buildings and roads and other human artifacts actually cover less than 1 percent" (Ausubel, Victor, and Wemick 1995: 9).
Nor has population growth in China led to excessive crowding. Despite both general and urban population growth, the amount of living space per person has increased 215 percent in rural areas and 100 percent in urban areas since 1980 (Riskin 1996: 363).
There is also general concern about whether China (and other nations) can sustain "megacities" given the widespread belief that human health and the environment are natural casualties of rapid Third World urbanization. While it's certainly true that governmental interventions in lesser developed countries often indirectly fosters the growth of megacities at the expense of the agricultural economy and the efficiency of the economy as a whole (see Powelson and Stock 1990), megacities are, as a general matter, an important component of economic growth, particularly in the lesser developed world (Montgomery 1988). Their emergence is a sign not of demographic disaster but of economic development. Urban growth is so important to the developing world that scholars believe restricting urbanization to combat pollution will do more economic harm than good (Shukla and Parikh 1992: 425). Moroever, there is good reason to believe that restricting city size would actually increase overall national pollution rates by fostering resource-costly inefficiencies and increasing overall transportation costs and attendant fuel-based emissions (Mills and Graves 1986).
Finally, there is certainly little to the argument that population growth somehow in and of itself impedes economic progress. A dozen statistical studies, starting in 1967 by Kuznets, have found no negative statistical relationship between population growth and economic growth.14
The most important step China can take to protect human health and the environment is to protect private property rights, ensure that markets remain as free from government intervention as possible, and protect the resulting engine of economic growth. Since poverty is also a major cause of environmental destruction, economic growth serves both a social and ecological function.
China would be well advised to cease paying lip-service to the international sustainable development agenda as forwarded by the United Nations and the host of mostly Western environmental NGOs (non-governmental organizations). Agenda 21-an action plan for sustainable development signed by China at the UN "Earth Summit" held in Rio de Janeiro in 1992 (see United Nations 1992)-is by-and-large an ill-considered call for massive state intervention in the economy that would only undercut the very market forces necessary to secure economic growth. The official white paper on Population, Environment, and Development in China in the 21st Century, otherwise known as "China's Agenda 21," is a 20-chapter document calling for massive centralized environmental planning to implement the UN's Agenda 21 at home (National Environment Protection Agency 1995). The white paper found its way into the ninth five-year plan for national economic and social development that was adopted by the 14th National People's Congress in March 1996. There is, however, widespread suspicion that the white paper is actually more with appeasing Western NGOs and foreign loan agencies than it is with guiding China's policy in the future. Sustainable development is a kind of socialist subterfuge, an attempt to reimpose state planning of the economy-which, in reality, means state planning of people's lives-under a new rationale: the protection of the environment. Such an agenda would not only exacerbate poverty and human suffering in China, it would harm the environment and injure future generations as well. China should ignore Western entreaties to undertake this project and stick with the liberal reform path it embarked upon two decades ago. The best way to ensure that development is sustainable is to ensure the protection of economic and personal freedom.
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1. For a summary of the various economic, ecological, and socio-cultural conceptions of sustainable development, see Munasinghe (1993: 3).
2. While a veritable mountain of important books and essays have been written expounding on this theme, perhaps the best two representatives of the "resource-crash" genre are Donella Meadows et al. (1972), The Limits to Growth: A Report for the Club of Rome's Project on the Predicament of Mankind, and Meadows et al. (1992), Beyond the Limits: Confronting Global Collapse and Envisioning a Sustainable Future.
3. The data on the petroleum industry cited in this paragraph are from the U.S. Department of Energy (1998).
4. For a quick review of the pertinent data and the debate over this matter over the last 40 years, see The Economist (1997: 19-21). For a more comprehensive summary of the data, see Simon (1995: 279-442).
5. For additional texts that have built upon Barnett and Morse's work, see V.K. Smith (1979), Gordon (1996, 1967), and Adelman (1995).
6. See, for example, Landes (1969), Osterfeld (1992), Rosenberg and Birdzell (1986), Raico (1994), Bauer (1981: 185-90), and North (1988).
7. See, for example, Kay (1991); Pickett, Parker, and Fiedler (1992); Walker (1992); and Noss (1990).
8. For a summary and a sympathetic critique of Weiss, see Barresi (1997).
9. For a thorough review of the theoretical and practical difficulties in defining and assigning rights to future generations, see Baier (1984), Barry (1997), and Golding (1972).
10. According to the WRI (1994: 68) only 1.03 kilograms of oil-equivalent energy was required to produce a dollar's worth of goods in 1988 compared to 1.44 kilograms of oil-equivalent energy per dollar's worth of production in 1980. Worldwatch Institute analysts confirm that China reduced its energy intensity by one-third between 1978 and 1990 (Ryan and Flavin 1995: 126).
11. While it is true that only 0.7 percent of China's GNP is spent on environmental protection compared to over 3 percent in most Western nations (Ryan and Flavin 1995: 130), increases in that expenditure must be done carefully so that economic growth is not unduly constrained.
12. For an excellent summary of the state of agricultural science, see Osterfeld (1992: 64-72).
13. For a brief discussion of the issue, see Bailey (1994) and Ames (1995).
14. For a comprehensive review of the population literature, see Osterfeld (1992: 104-35).