This note responds to Deirdre McCloskey's 2002 critique of the Earth Charter by arguing that the concepts of sustainability, intergenerational equity and political democracy are essential to an understanding of that international manifesto.

Richard W. England

English

Research Papers in Economics

471
Eastern Economic Journal, Vol. 29, No. 3, Summer 2003
Richard W. England:  Department of Economics, University of New Hampshire, Durham, NH 03824.
E-mail: richard.england@unh.edu
.
WHAT’S WRONG WITH MCCLOSKEY
ON THE EARTH CHARTER
Richard W. England
University of New Hampshire
I would like to open this note by thanking Deirdre McCloskey for enlivening the
often bland discourse of academic economics by serving us polemics in the Other
Things Equal section of this Journal.  Her columns are frequently a source of highly
spiced food for thought.  I was unable to read her commentary on the Earth Charter
[McCloskey, 2002] with my normal gusto, however, because it is loaded with errors
of fact, logic and omission.
For example, Professor McCloskey categorically rejects the Earth Charter claim
that the global “gap between rich and poor is widening.”  What evidence does she
offer for her rejection of this claim?  The examples of South Korea, Thailand, the
Czech Republic and India during the past decade constitute her rather skimpy evi-
dentiary base.  But doesn’t the literature on international convergence demonstrate
that one’s perception of widening or narrowing income gaps depends crucially on
one’s sample of nations and the historical period studied?  Pritchett [1997] reports,
for example, that the income gap between today’s affluent and poor nations has
grown dramatically during the past century and a half.
McCloskey argues that “decades of rule by…socialists” account for poor macro-
economic performance in some developing nations. Is her claim really so obvious?
Angus Maddison [1991, 80-1] suggests that colonial rule prior to political indepen-
dence could help to explain the poor economic performance of some developing na-
tions.  Perhaps parliamentary socialism in India after 1947 was a reaction, in part,
to the earlier imposition of a plantation economy by British colonial rulers.  Isn’t that
a more fruitful hypothesis than blaming London professors for planting bad ideas in
the brains of Indian students?
The Earth Charter asserts that “[a]n unprecedented rise in human population
has overburdened ecological and social systems.”  This thesis is certainly debatable,
but McCloskey’s observation that both population and also per capita income have
grown dramatically during the past two centuries misses the point.  The scientific
and policy issue raised by the Earth Charter is whether population and income growth
are sustainable in the future if those demographic and economic trends depend upon:
· Rapid depletion of fossil fuel reserves
· Accumulation of greenhouse gases in the atmosphere
· Accumulation of toxic chemicals and radioactive materials on our land and
in our waterways472 EASTERN ECONOMIC JOURNAL
· Loss of biodiversity and other ecosystem services because of accelerating land
use change, and
· Mining of soil and groundwater inventories to operate commercial agricul-
ture.
McCloskey makes the dubious claim that the needs of future generations can be
guaranteed by “private property with a good capital market.”  Does she seriously
propose that we could convert common property resources like the atmosphere and
the oceans into parcels of private property?  Even if all assets could be privatized,
would financial markets as they really exist  (stock market bubbles, mutual fund
managers and corporate executives with a three-month time horizon, etc.) encour-
age proper stewardship of those assets?  Norgaard and Howarth [1991] have argued
quite persuasively that markets cannot guarantee an equitable distribution of assets
among generations.  Dasgupta, Mäler, and Barrett [1999, 72] have shown that “if
consumption and production activities give rise to environmental pollution…, the
social rate of return on investment could be zero even when the private rate is posi-
tive….”  Can we rely upon a private capital market, then, to allocate resources among
generations in a socially beneficial way in the presence of pervasive pollution ef-
fects?
Perhaps the greatest hole in Professor McCloskey’s critique of the Earth Charter
is her failure to mention its strong emphasis on strengthening democracy and en-
couraging broad participation in decision making.  Does this silence signal her strong
preference for private property rights and bilateral exchange in markets instead of
political discourse, elections and majority rule?  If so, others might disagree with
her.  Many citizens in Brazil, Poland and South Africa have become disenchanted
with the “market capitalism” that McCloskey endorses so uncritically.  Perhaps they
will choose the ballot box, and not the debit card, to register their preferences and
aspirations.
REFERENCES
Dasgupta, P., Mäler, K.-G., and Barrett, S.  Intergenerational Equity, Social Discount Rates, and Global
Warming, in Discounting and Intergenerational Equity, edited by P.R. Portney and J.P. Weyant.
Washington: Resources for the Future, 1999, 51-77.
Maddison, A.  Dynamic Forces in Capitalist Development: A Long-RunComparative View.  Oxford: Oxford
University Press, 1991.
McCloskey, D.N.  What’s Wrong with the Earth Charter.  Eastern Economic Journal, Spring 2002, 269-272.
Norgaard, R.B., and Howarth, R.B.  Sustainability and Discounting the Future, in Ecological Econom-
ics, edited by R. Costanza.  New York: Columbia University Press, 1991, 88-101.
Pritchett, L.  Divergence, Big Time.  Journal of Economic Perspectices, Summer 1997, 3-17.
Deirdre McCloskey

What’s Wrong with McCloskey on the Earth Charter

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