e-learning centre on sustainable development
COURSE ON SUSTAINABLE DEVELOPMENT
MODULE 2 - ECONOMIC DEVELOPMENT
Economic Development and Sustainability: Poverty and Wealth
When people think of development, they first think of economic development, which is one of the three pillars of sustainable development. Yet, while the world has become wealthier, the extremes of wealth and poverty have also increased, a trend that is itself unsustainable. It is difficult in the West to imagine the reality of extreme poverty without first-hand experience, yet one third of humanity suffers its consequences. For the poor who are increasingly aware of how unjust their situation is, acceptance of the present system is intolerable.
The Western economic system has allowed a fraction of the world population to live in great comfort, while failing in the larger aims of development. By emphasizing increasing specialization, it has lost sight of the larger picture, and treats people as secondary. Once wealth reaches a certain level, continuing growth does not necessarily mean improved well-being. Many negative activities like auto accidents and pollution causing health problems are good for the economy. We are submerged in our own wastes. The globalization of trade and investment has not been balanced by equal freedom in the global movements of people, maintaining great economic distortions between countries and regions. The emphasis on productivity has produced a system that cannot generate sufficient employment for all who need it. Finally, the economists' short-term perspective ignores the slow degradation of the environment, and their preoccupation with growth is driving us rapidly up against planetary limits.
UNSUSTAINABILITY OF THE PRESENT WORLD ECONOMIC ORDER
All too many of these [man-made] ideologies...callously abandon
starving millions to the operations of a market system
that all to clearly is aggravating the plight of the majority of
mankind, while enabling small sections to live in a condition of
affluence scarcely dreamed of by our forebears.
The time has come when those who preach the dogmas of materialism,
whether of the east or of the west, whether of capitalism or
socialism, must give account of the moral stewardship they have
presumed to exercise. Where is the "new world" promised by these
ideologies?... Why is the vast majority of the world's peoples
sinking ever deeper into hunger and wretchedness when wealth on a
scale undreamed of by the Pharaohs, the Caesars, or even the
imperialist powers of the nineteenth century is at the disposal of
the present arbiters of human affairs?
That materialistic ideals have, in the light of
experience, failed to satisfy the needs of mankind calls for an
honest acknowledgement that a fresh effort must now be made to
find the solutions to the agonizing problems of the planet.
If long-cherished ideals and time-honoured institutions, if
certain social assumptions and religious formulae have ceased to
promote the welfare of the generality of mankind, if they no
longer minister to the needs of a continually evolving humanity,
let them be swept away and relegated to the limbo of obsolescent
and forgotten doctrines. Why should these, in a world subject to
the immutable law of change and decay, be exempt from the
deterioration that must needs overtake every human institution?
For legal standards, political and economic theories are
solely designed to safeguard the interests of humanity as a whole,
and not humanity to be crucified for the preservation of the
integrity of any particular law or doctrine.
Having penetrated and captured all significant centres of power
and information at the global level, dogmatic materialism ensured
that no competing voices would retain the ability to challenge
projects of world wide economic exploitation.
The fate of what the world has learned to call social and
economic development has left no doubt that not even the most
idealistic motives can correct materialism's fundamental flaws.
Born in the wake of the chaos of the Second World War,
"development" became by far the largest and most ambitious
collective undertaking on which the human race has ever embarked.
Its humanitarian motivation matched its enormous material and
technological investment. Fifty years later, while acknowledging
the impressive benefits development has brought, the enterprise
must be adjudged, by its own standards, a disheartening failure.
Far from narrowing the gap between the well-being of the small
segment of the human family who enjoy the benefits of modernity
and the condition of the vast populations mired in hopeless want,
the collective effort that began with such high hopes has seen the
gap widen into an abyss.
While it is easy to criticize the present economic system, an alternative has yet to be devised, although small-scale experiments have begun. Spiritual principles can suggest what some of the characteristics of that new more altruistic and sustainable system might be. They present a strong contrast to the values of the present consumer society.
PRINCIPLES FOR A NEW ECONOMIC ORDER
In cycles gone by, though harmony was established, yet, owing to
the absence of means, the unity of all mankind could not have been
achieved.... In this day, however, means of communication
have multiplied, and the five continents of the earth have
virtually merged into one. And for everyone it is now easy to
travel to any land, to associate and exchange views with its
peoples, and to become familiar, through publications, with the
conditions, the religious beliefs and the thoughts of all men. In
like manner all the members of the human family, whether peoples
or governments, cities or villages, have become increasingly interdependent.
For none is self-sufficiency any longer possible, inasmuch as
political ties unite all peoples and nations, and the bonds of
trade and industry, of agriculture and education, are being
strengthened every day. Hence the unity of all mankind can in this
day be achieved.
...although material civilization is one of the means for
the progress of the world of mankind, yet until it becomes
combined with Divine civilization, the desired result,
which is the felicity of mankind, will not be attained. Consider!
...all these weapons of war are the malignant fruits of material
civilization. Had material civilization been combined with Divine
civilization, these fiery weapons would never have been invented.
Nay, rather, human energy would have been wholly devoted to useful
inventions and would have been concentrated on praiseworthy
discoveries.... Material civilization is like the body. No matter
how infinitely graceful, elegant and beautiful it may be, it is
dead. Divine civilization is like the spirit, and the body gets
its life from the spirit, otherwise it becomes a corpse.
Central to the task of reconceptualizing the organization of human affairs is arriving at a proper understanding of the role of economics. The failure to place economics into the broader context of humanity's social and spiritual existence has led to a corrosive materialism in the world's more economically advantaged regions, and persistent conditions of deprivation among the masses of the world's peoples. Economics should serve people's needs; societies should not be expected to reformulate themselves to fit economic models. The ultimate function of economic systems should be to equip the peoples and institutions of the world with the means to achieve the real purpose of development: that is, the cultivation of the limitless potentialities latent in human consciousness.
Society must develop new economic models shaped by insights that arise from a sympathetic understanding of shared experience, from viewing human beings in relation one to another, and from a recognition of the central role that family and community play in social and spiritual well-being. Within institutions and organizations, priorities must be reassessed. Resources must be directed away from those agencies and programs that are damaging to the individual, societies and the environment, and directed toward those most germane to furthering a dynamic, just and thriving social order. Such economic systems will be strongly altruistic and cooperative in nature; they will provide meaningful employment and will help to eradicate poverty in the world.br> (Bahá'í International Community, Valuing Spirituality in Development 1998)
RETHINKING THE SOCIO-ECONOMIC SYSTEM
Sustainability requires rethinking the present economic system. Economic development has been a major international effort for a half-century, but despite major improvements it has failed in its objective to eliminate poverty in the world. To achieve sustainable development, we need to go beyond money and industrial capital to consider a much wider range of types of capital. These should include not only man-made or physical capital, but the human capital built up through education and experience, the natural capital of our planetary environment and its resources, financial capital, the social of our institutions and communities, intellectual and cultural capital, and the spiritual capital of our values and ethical systems. Since many of these forms of capital are not bought and sold and do not have an obvious monetary value, the market fails to account for them correctly and government must develop other ways to protect the public interest. For example, mainstreaming the environment so that it is considered in all decision-making, particularly economic planning, can help to ensure sustainability.
CAPITAL AND LABOUR
The question of socialization is very important. It will not be solved by strikes for wages. All the governments of the world must be united and organize an assembly the members of which should be elected from the parliaments and the nobles of the nations. These must plan with utmost wisdom and power so that neither the capitalists suffer from enormous losses nor the laborers become needy. In the utmost moderation they should make the law; then announce to the public that the rights of the working people are to be strongly preserved. Also the rights of the capitalists are to be protected. When such a general plan is adopted by the will of both sides, should a strike occur, all the governments of the world collectively should resist it. Otherwise the labor problem will lead to much destruction, especially in Europe. Terrible things will take place.
For instance, the owners of properties, mines and factories should share their incomes with their employees and give a fairly certain percentage of their products to their workingmen in order that the employees may receive, beside their wages, some of the general income of the factory so that the employee may strive with his soul in the work.
...every factory that has ten thousand shares will give two
thousand shares of these ten thousand to its employees and will
write the shares in their names, so that they may have them, and
the rest will belong to the capitalists. Then at the end of the
month or year whatever they may earn after the expenses and wages
are paid, according to the number of shares, should be divided
among both. In reality, so far great injustice has befallen the
common people. Laws must be made because it is impossible for the
laborers to be satisfied with the present system. They will strike
every month and every year. Finally, the capitalists will lose.
O MY SERVANT!
O MY SERVANT!
It is incumbent upon each one of you to engage in some occupation
- such as a craft, a trade or the like. We have exalted your
engagement in such work to the rank of worship of the one
true God.... Waste not your hours in idleness and sloth, but
occupy yourselves with what will profit you and others....
It is the duty of those who are in charge of the organization of
society to give every individual the opportunity of acquiring the
necessary talent in some kind of profession, and also the means of
utilizing such a talent, both for its own sake and for the sake of
earning the means of his livelihood. Every individual, no matter
how handicapped and limited he may be, is under the obligation of
engaging in some work or profession, for work, especially when
performed in the spirit of service, is according to Bahá'u'lláh a
form of worship. It has not only a utilitarian purpose, but has a
value in itself, because it draws us nearer to God, and enables us
to better grasp His purpose for us in this world.
In order to correct for the shortcomings of current accounting systems, we need new ways to measure the dynamics of creating and maintaining wealth in all its forms. This should include not only wealth accounts but also natural capital accounts. The human resource component is the most important, including its contribution to social capital and the formal and informal institutions that maintain our society. Equally important but more difficult to measure is the role of values, and the level of trust that is essential for society to operate. Indicators of sustainability are one way to improve our accounting for the directions that development is taking.
DISTRIBUTION OF WEALTH
Overstep not the bounds of moderation, and deal justly with them that serve thee. Bestow upon them according to their needs, and not to the extent that will enable them to lay up riches for themselves, to deck their persons, to embellish their homes, to acquire the things that are of no benefit to them, and to be numbered with the extravagant. Deal with them with undeviating justice, so that none among them may either suffer want, or be pampered with luxuries. This is but manifest justice.
Allow not the abject to rule over and dominate them who are noble and worthy of honor, and suffer not the high-minded to be at the mercy of the contemptible and worthless, for this is what We observed upon Our arrival in the City (Constantinople), and to it We bear witness. We found among its inhabitants some who were possessed of an affluent fortune and lived in the midst of excessive riches, while others were in dire want and abject poverty. This ill beseemeth thy sovereignty, and is unworthy of thy rank.
Let My counsel be acceptable to thee, and strive thou to rule
with equity among men, that God may exalt thy name and spread
abroad the fame of thy justice in all the world. Beware lest thou
aggrandize thy ministers at the expense of thy subjects. Fear the
sighs of the poor and of the upright in heart who, at every break
of day, bewail their plight, and be unto them a benignant
sovereign. They, verily, are thy treasures on earth. It behoveth
thee, therefore, to safeguard thy treasures from the assaults of
them who wish to rob thee. Inquire into their affairs, and
ascertain, every year, nay every month, their condition, and be
not of them that are careless of their duty.
And among the teachings of Bahá'u'lláh is voluntary sharing
of one's property with others among mankind. This voluntary
sharing is greater than equality, and consists in this, that man
should not prefer himself to others, but rather should sacrifice
his life and property for others. But this should not be
introduced by coercion so that it becomes a law and man is
compelled to follow it. Nay, rather, man should voluntarily and of
his own choice sacrifice his property and life for others, and
spend willingly for the poor...
All must be producers. Each person in the community whose income
is equal to his individual producing capacity shall be exempt from
taxation. But if his income is greater than his needs he must pay
a tax until an adjustment is effected. That is to say, a man's
capacity for production and his needs will be equalized and
reconciled through taxation. ...if his necessities exceed his
production he shall receive an amount sufficient to equalize or
adjust. Therefore taxation will be proportionate to capacity and
production and there will be no poor in the community.
Poverty elimination is essential to achieve a sustainable society, but our present economic system has failed to create adequate mechanisms for income distribution and increased the extremes of wealth and poverty, which is unsustainable. The relationship between poverty and the environment is interpreted in different ways. In the mainstream view, the poor have a short planning horizon, few options, poor health and illiteracy, leaving them with the choice of depleting their local resources or migrating from rural to urban areas or to other countries. In this view, the policy response is to raise agricultural productivity and improve the marketing of the products of the poor. However, the latter is often blocked by the high agricultural subsidies and trade protectionism of the industrialized countries.
An alternative view is that the poor have traditionally prevented environmental degradation, but their sustainable adaptations have broken down through the advice of outside experts and perverse economic incentives based on unjustified assumptions. In this view, sustainability can be enhanced by encouraging traditional resource use systems.
POVERTY AND WEALTH
Issues of food, nutrition, health and shelter are central to the challenge of providing an adequate standard of living for all members of the human family. These issues cannot, however, be tackled solely as technical or economic problems. Eliminating hunger and malnutrition; establishing food security; providing adequate shelter; and achieving health for all will require a shift in values, a commitment to equity, and a corresponding reorientation of policies, goals and programs.
The technologies and resources exist to meet the basic needs of
humanity and to eliminate poverty. Equity in the use of
these technologies and resources, however, will come about only
with certain understandings and commitments. While individuals
must do their utmost to provide for themselves and their
dependents, the community must accept responsibility, when
necessary, to help meet basic needs. Access to development
programs and their benefits must be ensured for all. The economics
of food production and distribution will have to be reoriented and
the critical role of the farmer in food and economic security
properly valued. With regard to health – the physical, spiritual,
mental and social well-being of the individual – access to clean
water, shelter, and some form of cheap energy would go a long way
toward eradicating the problems that currently plague vast numbers
of individuals and communities.
Know ye in truth that wealth is a mighty barrier between
the seeker and his desire, the lover and his beloved. The rich,
but for a few, shall in no wise attain the court of His presence
nor enter the city of content and resignation....
Be not troubled in poverty or confident in riches, for
poverty is followed by riches, and riches are followed by poverty.
Yet to be poor in all save God is a wondrous gift, belittle not
the value thereof, for in the end it will make thee rich in God...
Cleanse thyself from the defilement of riches and in perfect
peace advance into the realm of poverty; that from the well-spring
of detachment thou mayest quaff the wine of immortal life.
[The true seeker] should be content with little, and be
freed from all inordinate desire.... He should succour the
dispossessed, and never withhold is favour from the destitute.
Tell the rich of the midnight sighing of the poor, lest
heedlessness lead them into the path of destruction, and deprive
them of the Tree of Wealth. To give and to be generous are
attributes of Mine; well is it with him that adorneth himself with
Wealth is praiseworthy in the highest degree, if it is
acquired by an individual's own efforts and the grace of God, in
commerce, agriculture, art and industry, and if it be expended for
philanthropic purposes. Above all, if a judicious and resourceful
individual should initiate measures which would universally enrich
the masses of the people, there could be no undertaking
greater than this, and it would rank in the sight of God as the
supreme achievement, for such a benefactor would supply the needs
and insure the comfort and well-being of a great multitude. Wealth
is most commendable, provided the entire population is wealthy.
If, however, a few have inordinate riches while the rest are
impoverished, and no fruit or benefit accrues from that wealth,
then it is only a liability to its possessor. If, on the other
hand, it is expended for the promotion of knowledge, the founding
of elementary and other schools, the encouragement of art and
industry, the training of orphans and the poor - in brief, if it
is dedicated to the welfare of society - its possessor will stand
out before God and man as the most excellent of all who live on
earth and will be accounted as one of the people of paradise.
No deed of man is greater before God than helping the poor....
Each one of you must have great consideration for the poor and
render them assistance. Organize in an effort to help them and
prevent increase in poverty. The greatest means for prevention is
that whereby the laws of the community will be so framed and
enacted that it will not be possible for a few to be millionaires
and many destitute. One of Bahá'u'lláh's teachings is the
adjustment of means of livelihood in human society. Under this
adjustment there can be no extremes in human conditions as regards
wealth and sustenance. For the community needs financier, farmer,
merchant and laborer just as an army must be composed of
commander, officers and privates. All cannot be commanders; all
cannot be officers or privates. Each in his station in the social
fabric must be competent; each in his function according to
ability; but justness of opportunity for all.
What are some of the characteristics of the Western economic system that make it unsustainable?
What role does work play in development?
What attitudes towards poverty and wealth will help us to achieve sustainable development?
Schumacher, E. F. (1973). Small Is Beautiful: A Study of Economics as if People Mattered. A classic critique of economics that is still relevant today.
Furtado, José I. dos R. and Tamara Belt (2000).
Economic Development and Environmental Sustainability. World Bank
Institute Learning Resources Series. World Bank, Washington, D.C. 116 p.
(report no. 20262 available as pdf, text or publication on demand from
World Bank Publications at
This training manual provides clear short explanations of many aspects of sustainable development.