A University of Sussex DPhil thesis Available online via Sussex Research Online: http://sro.sussex.ac.uk/ This thesis is protected by copyright which belongs to the author. This thesis cannot be reproduced or quoted extensively from without first obtaining permission in writing from the Author The content must not be changed in any way or sold commercially in any format or medium without the formal permission of the Author When referring to this work, full bibliographic details including the author, title, awarding institution and date of the thesis must be given Please visit Sussex Research Online for more information and further details The nature of growth: The postwar history of the economy, energy and the environment Richard Lane PhD in International Relations University of Sussex September 2014 I hereby declare that this thesis has not been and will not be, submitted in whole or in part to another University for the award of any other degree. Signature:.................................................................................... Table of contents Acknowledgements 1 1. Research Summary 2 2. Introduction 3 3. The promiscuous history of the economy, energy and environment 11 The natural history of the great acceleration 13 Promiscuous history: relationality, performativity, translation 18 The national economy 23 Economy and growth 28 The promiscuous history of growth 33 4. Economy 36 The necessity of growth 38 The economy and the fear of postwar depression 39 Expansion economics and security 42 The scarcity of natural resources 44 Dewhurst, Malthus, and the postwar resource scarcity 45 Economy and scarcity: the postwar fears over growth 48 Resources for Freedom, resources for growth 50 The Paley report and the concern with growth 52 Scarcity and reserves 54 The Paley approach 59 Resources For the Future and scarcity 61 Growth and conservation 62 Resources For the Future 64 The death of absolute resource scarcity 67 The growth of the economy 71 5. Energy 76 Economy and energy 79 The system of energy 79 The postwar energy for growth 81 Oil and the international economy 85 Flows of oil, flows of money 85 The high price of cheap Middle Eastern oil 89 The domestic US basis of expanding foreign production 91 Energy and the threat from peak oil 94 Atoms for the economy 95 Hubbert and peak oil 97 Peak production and the threat to oil 99 Overcoming Hubbert’s peak 102 Oiling the system of energy 106 The restriction and expansion of oil 106 Securing the history and future of oil 109 The oil industry becomes the energy industry 112 The energy for growth 115 6. Environment 119 The benefits and costs of water 121 The Army Corps of Engineers and multiple-purpose water development 122 The search for consistency 126 The Green Book 128 Welfare economics, efficiency, and the conservationist backlash 130 Bringing welfare to water Making a portable economic technology 131 Making a portable economic technology 136 National efficiency and the conservationist backlash 138 The polluted Spaceship Earth 141 Pollution becomes pervasive 142 The coming Spaceship Earth 145 Environmental limits and the antigrowth movement 149 Nixon and NEPA 150 The limits to air pollution 153 The antigrowth movement 156 The environment and The Limits to Growth 158 7. The nature of growth 162 The sudden fragility of energy 164 The energy crisis 166 Energy price rises 168 The environment of economics 171 Water quality and the expansion of economic valuation 172 Materials Balance and pollution as externality 176 The economics of the new environment 179 The new limits to growth 182 Energy, economy, and the new limits to growth 183 Environmental economics and the Clean Air Act’s growth ban 188 The economic impact of environmental regulation 190 8. Conclusion: The economy, energy, environment and the nature of 192 growth References 200 Acknowledgements This thesis would not exist without the generous support, often in the face of outrageous provocation, of my supervisors Samuel Knafo, Pete Newell and in a previous incarnation, Jan Selby. As usual, Matthieu Hughes, Steffan Wyn Jones, and most of all, my bruv, Sahil Dutta have read and commented on everything I’ve written. In some cases numerous times. My thanks also go to Mareike Beck, Earl Gammon, Ben Stephan, Arno Simmons and Mat Paterson for thoughtful feedback at various points throughout this process. Niamh Kelly’s (apparently) near-endless generosity, support and love have enabled me to retain some semblance of sanity in the face of the vast and indifferent cyclopean horror of the PhD process. And Lola, who has been a constant source of joy, even though she’s too young to read this. And a dog. This work was financially supported by an ESRC studentship. And Niamh Kelly. Again. !1 1. Research Summary The environment and energy have been fundamental to the growth of the economy. This looks like a straightforward claim. But it is not. In order to understand how these are related, how growth came to be associated with the economy, and how this growth came to be seen as the unshakeable fundament of any environmental politics, this thesis focuses on a brief period of largely postwar history, and almost exclusively on a single country - America. At this time, and in this place, the technical removal of material constraints, the provision of energy, the construction of environmental limits and then their dismantling, forms the complex history of the growth of the environment and the environment of growth. This history created both the possibility of the contemporary political economy of the environment as well as its limits. This thesis traces the way that the economy, energy and the environment were co-constructed, transformed and interwoven in the US from the postwar years through to the mid 1970s, through the assembling, application and reassembling of the economic techniques and technologies that defined growth, scarcity and efficiency. To this end, it orients itself around the impacts of the 1952 President’s Materials Policy Commission - known as the Paley Commission, and the think tank that was set up in its wake: Resources For the Future (RFF). The Paley Commission report and the RFF would, through their technical innovations play a key role in the construction of the economy as a separate, measurable and observable sphere of monetary flows, driven by an associated logic of exponential growth; energy as an interchangeable system of sources powering this economy; and the environment, initially as encompassing the economy and defined by finite limits, then reconstructed as external to the economy and where pollution is considered as an example of market failure to be rectified by the internalisation of externalities. !2 2. Introduction The environment and energy have been fundamental to the growth of the economy. This looks like a straightforward claim. But it is not. In order to understand how these are related, how growth came to be associated with the economy, how energy was understood as powering growth, and how this growth came to be seen as the unshakeable fundament of any environmental politics, this thesis focuses on a brief, quarter century period - from around 1950 to 1975 - of almost exclusively US history. At this time, and in this place, the ‘great acceleration’, the sudden postwar speeding up of economic growth, oil consumption and environmental despoliation (Steffen, Crutzen & McNeill 2007) began. This thesis tells the story of the complex, promiscuous nature of postwar growth, and how the great acceleration was initiated through the technical removal of material constraints on the economy beginning in the 1950s, the provision of a system of energy, the subsequent construction of environmental limits and then their dismantling during the 1970s. This process created both the possibility of the contemporary political economy of the environment as well as its limits, and in order to understand this brief period of history, I will begin with a letter. W. Stuart Symington had only been Chairman of the US National Security Resources Board (NSRB) for nine months when, in December 1950, he wrote to President Truman to formally propose a Presidential Commission on the state of the nation’s material resources. Symington, echoing the prevalent fears at the time, stated: [t]here is nothing more important to the future security of the United States than obtaining, now and in the future, an adequate supply of those raw materials necessary to build up our defences and maintain our economy. Already in many cases shortages of such materials are serious, and in some cases critical (cited in Goodwin 1981a:52-53) !3 These fears may have been prevalent in 1950, but they weren’t universally shared. For William S. Paley, the Columbia Broadcasting Service (CBS) Chairman, or ‘absentee landlord’ as he was known, given his tendency towards long and increasingly frequent vacations, boredom was a more pressing concern. Paley had been having trouble reengaging with the day-to-day running of his broadcasting company since his return from the second world war; and by 1950, Paley’s restlessness and ennui had been noticed by Frank Stanton, the CBS President. Stanton found Paley’s predicament perplexing, and was even more surprised when Paley’s wife, Babe, one day arrived at his office and declared immediately “We’ve got to do something about finding something interesting for Bill to do. He’s Bored” (cited in Smith 1990:311). Some time after Babe’s visit, Stanton was contacted by his old friend, Harry Truman. President Truman was looking for someone to head the commission proposed by Symington to analyse the nation’s natural resources, and Stanton, with Babe’s concern in mind, suggested Paley. And even more curiously than the palindromic quality of Babe’s phrasing, the something that Stanton found for Paley to do - Chair what would become the President’s Materials Policy Commission (PMPC), commonly referred to as the Paley Commission - turned out to be a rather interesting something indeed.