Sunday, September 26, 2010

The commodity frontiers

Karl Marx was not an agronomist, but he used the word ‘metabolism’ to describe how capitalist agriculture promoted exports that deprived the soil of nutrients. He had read German chemist Justus von Liebig’s agricultural chemistry. The solution that Liebig proposed for the day when guano from Peru would run out, was industrial fertilisers. In the 1980s, the word ‘metabolism’ was re-introduced into economics by Robert Ayres and Marina Fischer-Kowalski. Accounts of material flows show that an average citizen of the European Union uses per year (not counting water) about 15 tonnes of materials (biomass, material for metals, materials for building and fossil fuels). What comes in accumulates as stock (in buildings, for instance) or comes out as exports or waste.

Out Of This Earth: East
India Adivasis and the
Aluminium Cartel
Felix Padel, Samarendra Das
Orient BlackSwan
Rs 895; Pp 752
Export of materials per capita from the EU amount to about one tonne per year, while imports are four tonne or more. This is in contrast to countries specialising in the export of raw materials. In many Latin American countries, exports exceed imports (in tonnage) by 6:1. As in south and western Africa, in Orissa and other mining states of India, they follow what some Colombians call “the rule of San Garabato, compre caro y venda barato”; buy expensive and sell cheap. Saint Garabato did not care about the declining terms of trade, the resource curse, or the depletion of natural capital.

We are near peak oil in the Hubbert curve. Hence, the search for oil in “commodity frontiers” such as the Niger Delta, the Amazon of Peru and Ecuador, the Alberta oil sands and the deep bottom of the sea in the Gulf of Mexico or Brazil. The search for oil, gas, and for coal (which is plentiful still) reaches the most inconvenient places. Even an economy without growth, a steady-state economy, if based on fossil fuels, would need fresh supplies of energy as energy is dissipated and cannot be used twice.

Full review here Businessworld

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